KMD Kathmandu Brands

[winner (n)]

Just prior to announcing the Rip Curl acquisition I June 2019 KMDs market cap was about $680m. FY19 sales were $546m and NPAT was $58m

Since then (4 years) sales have doubled to $1.1 billion but NPAT is going to be about $45m

And today KMDs market cap is still about $680m ....even though they've raised the best part of $400m

Something not quite right eh

But some might say it just shows the huge potential and possible big share price gains once KMD sort their **** out and maybe get lucky

[LoungeLizard]

Just prior to announcing the Rip Curl acquisition I June 2019 KMDs market cap was about $680m. FY19 sales were $546m and NPAT was $58m

Since then (4 years) sales have doubled to $1.1 billion but NPAT is going to be about $45m

And today KMDs market cap is still about $680m ....even though they've raised the best part of $400m

Just prior to announcing the Rip Curl acquisition I June 2019 KMDs market cap was about $680m. FY19 sales were $546m and NPAT was $58m

Since then (4 years) sales have doubled to $1.1 billion but NPAT is going to be about $45m

And today KMDs market cap is still about $680m ....even though they've raised the best part of $400m

Something not quite right eh

But some might say it just shows the huge potential and possible big share price gains once KMD sort their **** out and maybe get lucky

Something not quite right eh

But some might say it just shows the huge potential and possible big share price gains once KMD sort their **** out and maybe get lucky

Hard to say. A lot of retailers - WHS springs to mind - are struggling to maintain market share and are only doing so through heavy discounting resulting in their margins going backwards. At the same time - again WHS is an example - they don't seem willing or able to take a knife to costs and instead think they can continue to pay high executive salaries and expand into new areas at a time of recession. I'd say KMD are probably better managed than WHS but that isn't much of a vote of confidence!

[winner (n)]

Dismal update from Kathmandu ......as KW says sales are being smashed

Do we complete this sentence for them ....

"Group underlying EBITDA1 for FY24 YTD is c. $16 million below last year, with Christmas and January retail trading periods to come" (they forgot to add) so H124 underlying EBITDA will be c. $22 below last year

Last years EBITDA  was $45m so this year about half that ....ouch?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/423822/409931.pdf

[BlackPeter]

Dismal update from Kathmandu ......as KW says sales are being smashed

Do we complete this sentence for them ....

"Group underlying EBITDA1 for FY24 YTD is c. $16 million below last year, with Christmas and January retail trading periods to come" (they forgot to add) so H124 underlying EBITDA will be c. $22 below last year

Last years EBITDA  was $45m so this year about half that ....ouch?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/423822/409931.pdf

Where is your last years number coming from? FY 2023 EBITDA was $200m (for the whole year), so lets say $67m for the first 4 months.

The $16m less they claimed for the first 4 months would reduce last years EBITDA by less than a quarter, not cut it in half.

[winner (n)]

Peter
H123 Normalised EBITDA $45.3m

Need to use this Normalised number as it includes rents/leases which is one of their bigger expenses eh

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/408724/391122.pdf

[KW]

Where is your last years number coming from? FY 2023 EBITDA was $200m (for the whole year), so lets say $67m for the first 4 months.

The $16m less they claimed for the first 4 months would reduce last years EBITDA by less than a quarter, not cut it in half.

Winner is correct - the ASX announcement dated 14 Feb 2023 said "Underlying 1H FY23 EBITDA1 is expected to be approximately $45 million" and they formally reported "Underlying EBITDA1 of $45.3 million" in March 2023.

[KW]

with Christmas and January retail trading periods to come" 

Many retailers and commentators are noting that in Australia and NZ, Black Friday sales now appear to have replaced Christmas and Boxing Day sales.  So consumers may already be tapped out and not in the mood to hit the stores on Tuesday. 

[BlackPeter]

Peter
H123 Normalised EBITDA $45.3m

Need to use this Normalised number as it includes rents/leases which is one of their bigger expenses eh

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/408724/391122.pdf

Fair enough, though my head is hurting. I guess bad enough to work with EBITDA, but normalizing this stuff feels somehow unnormal to me

[KW]

Fair enough, though my head is hurting. I guess bad enough to work with EBITDA, but normalizing this stuff feels somehow unnormal to me

Accounting is a creative art    But so long as they use the same definition each year it doesnt really matter as what you want is a direct comparison of performance between periods however they choose to measure it.

My pet bugbear is tech companies that capitalise software development and so never account for it in EBITDA.  Good companies expense it. 

[winner (n)]

The $45m ebitda ended up as $14m npat (the metric you prefer)

So a $$23m EBITDA this year May/could end up as npat of less than $5m

That's a big ouch too

[winner (n)]

Forbar forecast F24 npat at $15.7m (F23 $43.4m) ....I'd hazard a guess if achieved most will be coming in second half.

Jeez that's an EPS of 2.2 cents ....so currently on huge PE ratio ....but is at a cyclical low eh so no worries

[BlackPeter]

Forbar forecast F24 npat at $15.7m (F23 $43.4m) ....I'd hazard a guess if achieved most will be coming in second half.

Jeez that's an EPS of 2.2 cents ....so currently on huge PE ratio ....but is at a cyclical low eh so no worries

Miserable noises on the radio about the seasonal spending spree (or the lack thereof). Sounds like many retailers started already Pre-X-mas with Boxing day sales in order to move at least some of their goods. I am wondering how many of our retailers will bite the dust.

Obviously - we can now all sell our retail shares and commiserate each other, or we could start wondering which of the retailers are likely to survive and coming out stronger out of this crisis.

Who do people think will be the winners?

HLG? Clearly they do have their fan base (though most of the fans don't fit into the Glassons dresses ;

WHS?? Hard to say ... there is always a place for junk traders, but they clearly would need to do more than just wait in order to start through again ...

KMart? They moved from selling cheap junk with little staff and boosted their quality to reach nearly Warehouse standards (but still selling with less and less paid staff). Maybe, there always is a place for (one or two) junk traders.

BGP? Never really a fan of their sales strategy and too rarely in the need to buy something they sell, so I might not be the best judge in that regard ...

KMD? Sales strategy similiar to BGP, but they sell more stuff I am interested in, and most of it is really good quality. I'd think they will survive and thrive when the industry bounces back,but no doubt - they could do better as well.

amazon? It appears their business model works, but at least on our shores they still didn't got the transport channel (-time and -cost) under control)

temu? Interesting - they buy stuff cheap in China (and some of it is not too bad) and send it for free everywhere in the world. Their logistics must be planned by a genius - Order stuff in China and get it pre christmas in a bit more than a week. If its only for this achievement, they should thrive. Might be interesting to check their books, but if they managed to make money this way, than I expect amazon might have some tough times ahead.

Whatever it is - I think now is not the time to commisserate the terrible sales numbers, but to place the chips for the next round.

Only question is - who will be the winner of the crisis? At the moment are the chips really cheap ...

[Basil]

Whatever it is - I think now is not the time to commisserate the terrible sales numbers, but to place the chips for the next round.

Why place your bets now ?  Nicola Willis reckons the economy is going to be in the dog house for 2 more years.  I think it's too early to be making bets on retail recovering in 2024 and frankly, I like the chances of winning at that game a lot better if you sit out this round and play in early 2025.
I don't expect any horse to run a really good time at the track with the current boggy conditions.  Turners will put in a thoroughbred performance next year with the brilliance of Tina as the jockey but other than that...

[Perky]

The problem for you Basil is Turners only make money in NZ and Nicola is saying only NZ is poked.

KMD get about 12% of revenue from NZ. 70% plus from Australia.
Rip curl is also the biggest revenue brand for KMD not KMD products.

Sure tough for retailers at present but the global markets will get cracking again before NZ wakes up

Better tell TINA to get off the road when the KMD 1 billion revenue road train starts coming through...Beep Beeep get out of the way Tina


If you believe in the KMD brands and story better to buy at these cyclical lows and ride that next big incoming wave on your rip curl board right up the beach.

[BlackPeter]

Why place your bets now ?  Nicola Willis reckons the economy is going to be in the dog house for 2 more years.  I think it's too early to be making bets on retail recovering in 2024 and frankly, I like the chances of winning at that game a lot better if you sit out this round and play in early 2025.
I don't expect any horse to run a really good time at the track with the current boggy conditions.  Turners will put in a thoroughbred performance next year with the brilliance of Tina as the jockey but other than that...

I see where you are coming from. On the other hand - I found so far nobody who was able to predict the future (and this includes what the economy may or may not do), and I suppose that even Nicola Willis belongs to the same group of people.

Tourism might come back earlier than expected - I notice Cathy Pacific came back to ChCh and United started flying to ChCh.

Overseas students seem to boom again. I notice that some local schools have even problems to find enough host parents.

Interest rates might swiftly coming down when the economy does ...

But hey, what do I know? I learned at some stage that pessimists are as often right as optimists, however - optimists live longer and have more fun. What can I say?