KMD Kathmandu Brands

[winner (n)]

Profit wise F24 heading towards KMDs worst year ever ........maybe even worse than F20 covid year

Resilience they talk about ...but sadly missing I reckon

[Perky]

Allan Gray and superfund or acc be along shortly...Allan must have quite a big money tin

[Mos]

Looking at FY23 results when KMD achieved record sales, the GM of 59.1% is impressive but the underlying operating expenses of 49.5% of sales seems very high. Need to lower costs or achieve significantly higher sales off the same cost base. However, per the trading update, sales have weakened since then.

[KW]

One-armed Hawaiian surfer Bethany Hamilton fell out with Rip Curl but the dispute took a new turn more recently. 

The owner of surf brand Rip Curl is in a furore over transgender rights as the company's financial performance faces scrutiny.
The controversy emerged just two months after Rip Curl fell out with former ambassador and shark attack victim Bethany Hamilton over her refusal to compete against transgender women.

Kathmandu (KMD), founded in New Zealand, acquired Rip Curl in 2019 for $368 million.

A social media backlash debate emerged over the weekend with a Rip Curl ad campaign featuring transgender surfer Sasha Jane Lowerson.  Some Australian commentators argued the Instagram ad featuring Lowerson and subsequent backdown was a case of "go woke, go broke".

Burt said Rip Curl was now in a controversy likely out of all proportion to what was anticipated. He said somebody posted online: "Rip Curl, enjoy your Bud Light moment."

[winner (n)]

Diabolical update today

$15m ebitda sort of says breakeven at best ...not a good half year

Rip Curl becoming a problem child by looks of it

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/426457/412913.pdf

[BlackPeter]

Diabolical update today

$15m ebitda sort of says breakeven at best ...not a good half year

Rip Curl becoming a problem child by looks of it

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/426457/412913.pdf

Mmh - sure, lower revenues never sound flash. On the other hand - they gained last year in HY1 (+34,5%) much more on sales than they gave back this HY (-14.5%). They said they managed to kept their margin ... and to reduce their cost and inventory.

Maybe I am not objective on the use of the word "diabolical", but I could imagine worse

I hear they have currently a hard winter in the Northern hemisphere ... and for some funny reason the southern hemsiphere frequently follows this pattern. Hard winters are good for the sale of warm jackets.

Agree however - their sales strategy (focus on online) feels a bit dusty these days - and the shops I pass by occasionally are often quite empty - of customers as well as of desirable products. Even I had to buy recently my latest pair of mountain boots at Merrell, after first checking Kathmandu and MacPak. Better quality shoe at a lower (well, less inflated) price ...

Online the rise of temu is likely hurting them - and brick and mortar shops with good quality outdoor gear are these days a dime a dozen. They can't rely anymore just on the name Kathmandu to distinguish themselves ... I suppose the generation which bought at Kathmandu because the name remembered them at Ed Hillary's achievements is moving out of the outdoors equipment stores and into the retirement villages.

[Mos]

Lost their way. Evolved from a focused outdoor equipment and apparel company to another ineffective corporate.

[winner (n)]

Lost their way. Evolved from a focused outdoor equipment and apparel company to another ineffective corporate.

Sales trend doesn't look too bad, even allowing for recent ups and downs

Must be a worry seeing revenues still over 1 billion but last 12 months profit only about $20m

Skinny profit margin for a branded retailer .....yep mos maybe has become an ineffective corporate
You cannot view this attachment.

[Mos]

Yes Winner, sales is one thing but profit is another as you say. Costs are eye wateringly high per my December post.

[winner (n)]

 Kathmandu being killed by MacPac here and in Australia. Mountain Warehouse taking share from Kathmandu as well

No wonder KMD group performing badly ...and Rip Curl and shoes not pulling them through

Kathmandu woes summed up in BusinessDesk article

This bit pretty damning

Coriolis director Morris blames execution for the decline, saying from reading the earnings reports that the company has identified the issues.

"There's nothing that's not fixable with Kathmandu," he said.

"It's pretty straightforward to look and see what needs to be done, but in practice, it doesn't seem to be happening."

https://businessdesk.co.nz/article/retail/kathmandont-analysts-pan-nz-outdoor-retailer

[winner (n)]

So first half is a $9.7m LOSS

The Kathmandu brand/stores getting worse as time goes by ....almost beyond redemption I'd say


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/428176/415136.pdf

[BlackPeter]

So first half is a $9.7m LOSS

The Kathmandu brand/stores getting worse as time goes by ....almost beyond redemption I'd say


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/428176/415136.pdf

Hmm - not flash. Particularly considering that the outlook 6 months ago was not that bad

"Despite the challenging consumer sentiment, we are well positioned with tailwinds from continued return to travel, positive impact from the launch of innovative products and the outdoor lifestyle trend post-pandemic."

... and considering that others in the field managed to deal much better with the (undoubtedly) challenging consumer sentiment.

Not sure I would consider them as "beyond redemption" - and the article you posted just above clearly outlines the problems. Shouldn't be that hard to fix, but not sure whether I find the CEO's comments faith inducing that he is on the right path.

Hard to say where this is going - while I do see a market for them (and times improving), it still will be difficult if they allow others to eat their lunch.

[Basil]

it still will be difficult if they allow others to eat their lunch.

Mountain Warehouse are doing exactly that.  If you want a REAL sale, go there when one is on.  September at their Queenstown branch is a great place to be.

[Shareguy]

Gross Margins remain resilient, operating costs are being tightly managed and the Balance Sheet is in good shape (0.5x Debt/EBITDA) ... but with sales going backwards by c15% YoY making headway is difficult.

Loss of divi makes sense under the circumstances.   

[winner (n)]

GAP having same issues as Kathmandu

GAP saying they are changing wayscand goingbto become cool again

Probably too late for either to become cool again