Adventure apparel and outdoor equipment retailer Kathmandu has bucked the current retail trend, reporting a 55 per cent lift in profit and a 24.5 per cent increase in sales for the 2011 financial year.
As reported on Ragtrader.com.au, the retailer provided a trading update to the market in early August that previewed the substantial lift in sales and profit for the year ended July 31, 2011.
The final audited results, released today, confirmed Kathmandu's strong FY11 figures, with earnings before income tax (EBIT) up 32 per cent to $51.3 million (NZ$64 million), net profit up $13.9 million to $31.3 million (NZ$39.1 million). Sales also increased to record figure of $244.9 (NZ$309.1 million), with a same store sales growth of 15.7 per cent overall.
Kathmandu also celebrated the opening of its 100th store this year, with a total of 111 stores now launched, including 14 new additions – 11 in Australia and three outlets in New Zealand.
Kathmandu chief executive officer Peter Halkett cited the strong performance of these new stores, in combination with key promotional activity, and the strong Australian and New Zealand dollar for the sharp rise in revenue.
“We have achieved double-digit same store sales in both Australia and New Zealand and improved margins despite the well publicised difficult economic environment and the resulting impact on consumer demand in all our markets,” he said.
"Our 14 new stores have all performed very well and we see continued growth opportunities for Kathmandu as we expand our retail footprint and introduce new products and an updated brand identity to the market over the next year. Our key promotional activity [also] delivered volume growth at better margins in both countries [and] the strong currencies had a double benefit."
Halkett said the brand's continued investment in inventory also contributed to the bottom line.
“As we commented in our trading update last month, we made a substantial investment in inventory in FY11, which was a key factor in Kathmandu's sales growth throughout the year. We were able to meet demand through our three key promotional periods, whereas last year we were challenged by limited stock availability, particularly during our winter sale,” he said.
Summing up Kathmandu's prospects for the year ahead, Halkett said the business will continue to build on its brand and improve on successful strategies.
“The current retail environment, and cost pressures both domestically and internationally create a volatile and unpredictable environment. However, given our market position and brand strength, we remain well placed for further growth in FY12,” he said.
The retailer also plans to launch 15 new stores during the 2012 financial year, as part of its retail rollout program, with four sites already confirmed. Several outlets will also be refurbished with some existing stores relocated. The brand's product range will also be extended, along with further “enhancements and profile for the online business”.