Adventure apparel and outdoor equipment retailer Kathmandu has bucked the current retail trend and reported a rise in sales and a positive outlook for 2013.
The retailer, which reported a 36.2 per cent drop in earnings before interest and tax (EBIT) for the first half of fiscal 2012, has now posted a rise in full year revenue of 13.4 per cent to NZ$347.1 million.
However, despite the lift in sales, Kathmandu suffered 10.7 per cent drop in net profit (NPAT) to NZ$34.9 million, with EBIT also down 10.9 per cent to NZ$57.0 million.
Kathmandu CEO Peter Halkett said the second half year EBIT of NZ$44.3 million, however, was an improvement on last year following a difficult first half.
“This was a solid result given the difficult economic environment. It was pleasing to achieve positive same store sales growth throughout the year. It was also a year in which we lifted our investment programme to deliver future growth,” he said.
For the full year same store sales growth was 5.7 per cent (7.0 per cent at comparable exchange rates), for the company, with online sales growing “rapidly” from a relatively small base.
However, New Zealand outperformed Australia in same store sales growth. The company also revealed that for the first half of the year, Kathmandu’s relative sales performance in Australia has generally been weaker in those states not directly benefitting from activity in the resource sector.
The outlook for 2013 however, remains bright for the retailer, with an accelerated store rollout programme set to deliver nine new stores in Australia during the first half of the 2013 fiscal year, compared to five in the same period last year.
“To support our strong growth in online sales we are also about to launch a new platform to deliver an improved customer experience in existing markets, and to enable us to pursue global sales opportunities through this channel,” Halkett said.
He commented further that future sales growth in the UK market will be targeted via the online channel rather than building a larger store network and said Kathmandu’s overall key growth strategies remain consistent.
“We will improve company performance by continuing to invest in our store network through opening new stores and relocating or refurbishing existing stores. Maximising the return on the investment made in inventory will be a key focus, and operating costs will continue to be effectively managed,” he said.
“[Going forward], Kathmandu’s investment in systems to grow our online sales, both within Australasia and globally, will continue given the opportunity presented by this channel.”
Halkett also said that providing there is no further deterioration in economic conditions, Kathmandu expects an improvement in performance for the 2013 financial year.