• Xavier Simonet
    Xavier Simonet
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In its latest trading update, Kathmandu Holdings has issued information regarding the outbreak of the novel coronavirus.

With the effects of the virus still unfolding, Kathmandu said in a statement that it has plans in place to mitigate the impact. 

"The Group sources product from a diverse range of markets throughout Asia, and is actively monitoring any developments on its supply chain as a result of the coronavirus outbreak in China.

"There is not expected to be a material supply impact in the short term as sufficient inventory levels are held, assisted by the longer stock turn nature of technical product categories.

"Impact on consumer demand across the Group is currently not significant.

"The Group has mitigation plans in place if there is a prolonged disruption to our Chinese suppliers," it said. 

Meanwhile, in its latest trading update the Group reported that for the half year ended January 31 underlying EBIT is expected to be approximately 40% above the same period last year. 

The results for H1 FY2020 include three months of Rip Curl results following Kathmandu's acquisition of the business in October 2019. 

In the outdoor portfolio, Kathmandu achieved same store sales growth of 1.5% for the 26 weeks ended January 26 2020. 

The online sales for the business increased by over 30% in H1 FY2020 driven by improvements made to the online platform in the first half of 2019. 

Kathmandu's gross margin for the period is approximately 1.4% below the comparable period in 2019 due to the impact of year-on-year foreign currency movement. 

The Group's footwear business Oboz continued its strong trajectory with sales 10% above H1 FY2019. 

In the surf portfolio, Rip Curl's total sales for the three months of Kathmandu ownership are expected to be 2.7% above the comparable three-month period in 2019. 

Direct to consumer same store sales grew by +2.6% for the 12 full weeks of ownership from November 4 2019 to January 26 2020.

Rip Curl branded stores in Australia traded up 8.3% on a comparable basis in the key summer trading period.

Kathmandu Holdings CEO Xavier Simonet said that despite challenges of the past few months, the business maintained a stong position. 

"We are delighted to have completed the successful acquisition of Rip Curl, allowing us to significantly diversify our products, geography, and channels to market.

"The Christmas trading period has seen a further shift towards Black Friday and Boxing Day events.

"Low December market foot traffic between these two events, unusually hot weather, and bushfires in Australia, have combined to moderate first half sales.

"We have responded to these challenging Australian conditions by focusing on operational execution, and we are pleased to have achieved same store sales growth for the first half.

"Our diversification strategy has shown early benefits, with the Rip Curl surf focus helping to balance out the Kathmandu business," he said. 

Kathmandu will release the full results for the half year on March 30 2020. 

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