Adventure apparel retailer Kathmandu continues to buck the trend as sales soar for the first half of fiscal 2013.
The retailer has revealed a sales lift of 13.1 per cent, for the half year ended January 31, to NZ$165.9 million.
Earnings before interest and tax was also up 24.4 per cent to NZ$15.8 million, an increase of NZ$3.1 million compared with the prior corresponding period.
Net profit after tax rose NZ$4.3 million to NZ$10.3 million, and same store sales growth was 3.7 per cent (6.1 per cent at comparable exchange rates).
Commenting on the coup, Kathmandu CEO Peter Halkett said the strong sales growth over the period has been “underpinned by successful new store openings and a solid increase in same store sales, despite a challenging market overall”.
Halkett added that the retailer has also been buoyed by online sales growth over the period – up over 50 per cent on the same period last year – which has continued to be an important portion of this increase.
However, he said the online component of the business still represents less than five per cent of total sales.
“Along with the continued growth in online sales, the new stores we opened in a variety of locations and formats have generally met or exceeded our sales expectations” Halkett said.
Going forward, he said Kathmandu’s overall earnings growth for the full year in fiscal 2013 is expected to be underpinned by the continuation of growth in the Australian market, attributable to improving brand penetration and the performance of new stores opened during the year.
However, Halkett also flagged the key external risks to delivering an improvement in second half year performance as:
• The success of the two major promotional events in the second half of the year, particularly if either or both are impacted by unseasonal weather;
• The general economic environment which appears to remain volatile and has been highlighted until recently by generally low levels of consumer confidence.
“Sales through February and March have been impacted by the hot and generally dry weather in both Australia and New Zealand,” he said.
“However, as we have only just commenced our Easter sale, which is the second of our three largest promotional events each year, it is still too early to assess with reasonably certainty the overall result for the full year”.
Kathmandu continues to target 15 new permanent stores in the full financial year.
Five new permanent store locations are currently confirmed to be opened prior to July 31 2013: The Glen (Melbourne), Eastgardens (Sydney), Hobart CBD, Pukekohe and Westgate (Auckland).
In the UK during the second half of fiscal 2013, two stores are to be closed (Berners St, London and Brighton) and one new store (Kensington High St, London) is to be opened.
In concluding his assessment of the prospects for 2013 Halkett said Australian growth in particular is expected to yield positive results for the company going forward.
“I am confident in our ability to successfully execute Kathmandu’s growth strategies. In particular the strength of our Australian performance in tandem with effective management of our operating costs should deliver a strong profit outcome for 2013,” he said.