Strong sales boost Kathmandu profit

23:12, Aug 14 2013

Outdoor gear retailer Kathmandu has posted net profit of $10.3 million for the six months to January 31, a 72 per cent leap compared to the same period last year.

The figure was at the upper end of the earnings forecast the company provided in February when it said it expected net profit between $9.5m to $10.5m.

The surge in net profit was helped by the fact that this time last year the company faced one-off costs as it bedded in new systems, particularly in warehouse management, which did not recur this year.

Sales surged 13.1 per cent, or $19.2m to $165.9m and earnings before interest and tax were 24.4 per cent higher at $15.8 million.

A fully imputed interim dividend of 3 cents a share will be paid.

Kathmandu chief executive Peter Halkett said strong sales growth over the period had been underpinned by successful new store openings and a "solid" increase in same-store sales, despite a challenging market overall.

Australian same-store sales growth surged 9.6 per cent, outperforming New Zealand stores.

Online sales growth of more than 50 per cent on the same period last year was an important part of the 3.7 per cent increase in same-store sales growth but still represented less than 5 per cent of total sales.

The company opened nine new stores in Australia during the six months, and relocated three stores.

The new stores had met or exceeded sales expectations, Halkett said.

Gross profit margin had held steady with the same period last year within the 62-64 per cent target range.

The company plans to open 15 new stores this financial year with five to open before July 31, four of them in Australia.

Overall earnings growth for the full year would rely largely on continued growth in Australia, Halkett said.

The stock last traded at $2.45 a share