Kathmandu records $11m profit
Kathmandu today reported a significantly improved first-half profit and is continuing to aggressively open new stores.
The $11.4 million profit was up 10.7 per cent on last year's net profit of $10.3m for the six months to January 31, 2013.
Kathmandu Holdings opened five new permanent stores in the half, four in Australia and one in New Zealand, while two stores were closed.
The new Australian stores were Northland and Uni Hill Outlet in Melbourne, West Lakes in Adelaide, and Jindalee Outlet in Brisbane.
In New Zealand, a new store was opened at St Lukes in Auckland.
Kathmandu said it continued to target opening 15 new permanent stores in the full financial year.
Eight new permanent-store locations would be opened before July 31 including two in Melbourne, one in Brisbane, one in Perth, and four in regional Australia.
The regional locations would be Bunbury, Rockhampton, Traralgon, and Charlestown Square in Newcastle.
Kathmandu shareholders will receive an interim dividend of 3 cents a share on June 17.
In Australia, Kathmandu said its growing market penetration helped to deliver 6.6 per cent same-store sales growth, following a 9.6 per cent increase for the same period last year. New Zealand's 3.2 per cent same-store sales growth compared to a 1.3 per cent increase in the first half of the 2013 financial year.
The retailer announced earnings before interest and tax (Ebit) of $17.6m for the half-year ended January 31, an increase of $1.8m from the previous corresponding period.
Chief executive Peter Halkett said the first-half result was achieved through continuing strong same-store sales growth, particularly in Australia, combined with improved gross margins and effective management of costs.
"In the first half of FY14 same-store sales growth was plus-5.4 per cent at comparable exchange rates (though minus-3.5 per cent at actual exchange rates)," he said.
"Online sales grew by 49 per cent at comparable exchange rates, and this channel continues to provide promising future growth opportunities."
Halkett said the company was targeting an improved profit in 2014, after adjusting for the effect of exchange rates.
In terms of outlook the company said sales growth in the Australian market would underpin the full-year result.
"The Australian stores opening in FY14 are generally lower turnover stores compared to those opened in FY13," he said.
"As a result, the profit contribution from new stores will reduce in FY14. Our focus in the second half of the year will continue to be growing same store and online sales."
Halkett said the New Zealand economic environment and consumer sentiment was generally positive.
"But there is more uncertainty in Australia's prospects, and I anticipate it will continue to be the more challenging retail market during 2014," he said.
"Nevertheless our increasing brand awareness and profile in Australia makes me confident that we will see on-going sales growth this year".