Kathmandu profit falls in 'difficult environment'

22:42, Sep 19 2012

Outdoor gear retailer Kathmandu has posted a reduced profit for the year to July 31 as profit margins were squeezed and operating costs increased.

The company reported a 10.7 per cent fall in net profit to $34.9 million for the year in what it called a "difficult economic environment".

Kathmandu chief executive Peter Halkett said it was a "solid result" given the difficult economic environment and it was pleasing the company had achieved positive same store sales growth throughout the year.

Operating expenses shot up 18.4 per cent to $153 m on higher rent costs and one-off costs associated with implementing a new warehouse management system in the first half of the year.

Sales increased 13.4 per cent to NZ$347.1m.

For the full year same store sales growth was 5.7 per cent, with New Zealand same stores sale growth outperforming Australian stores.

Earnings before interest and tax were 10.9 per cent lower year-on-year at $57m.

The company opened ten new permanent stores during the year.

The second half year earnings before interest and tax of $44.3m was an improvement on last year following a "difficult" first half, Halkett said.

Provided there was no further deterioration in economic conditions, Kathmandu expected an improvement in performance in the next financial year, Halkett said.

The company declared a final dividend of 7 cents a share, bringing the total dividend payout for the year to 10 cents.

The stock rose 5.29 per cent on the news to $1.79 a share.