KMD Brands – the parent company of Kathmandu, Rip Curl and Oboz Footwear – has reported a statutory net loss after tax of NZ$414.4 million (~A$333.5 million) amid a post-tax impairment charge.
In its FY26 preliminary final report, the group reported a NZ$462.7 million impairment expense, which is NZ$394 million post-tax.
Minus the impairment, KMD reported an underlying NPAT loss of NZ$9 million.
This was also impacted by a 4.4 per cent lift in underlying operating expenses to NZ$565.2 million.
At the top line, group sales lifted by 6.5 per cent to just over $1.05 billion, with gross margin lifting 120 basis points to 57.7 per cent of sales.
According to KMD, sales momentum continued through the year, with year-on-year growth recorded across all three brands.
Kathmandu led this momentum with DTC sales up 11.1 per cent despite four fewer stores. On a constant currency basis, total sales were up 1.7 per cent year-on-year. The group also reported that channel and product driven margin improvement, improved sourcing, and favourability in input cost FX supporting growth inclusive of $8 million of tariff refunds.
Kathmandu’s same store sales, including online, grew 8.2 per cent, with the retailer’s earnings before interest and tax (EBIT) lifting into the black at NZ$1.1 million, compared to an EBIT loss of NZ$19.6 million in FY25.
The outdoor wear retailer’s gross margin decreased 0.4 per cent of sales due to product mix change, a focus on selling through aged inventory in the first half and maintaining competitive promotional intensity through the year.
Second half gross margin grew 0.6 per cent of sales, despite being impacted in the fourth quarter by unseasonally warm weather on the east coast of Australia.
For Rip Curl, its total sales grew 3.8 per cent in FY26 to NZ$571.2 million, with its EBIT up 7.9 per cent to NZ$15.4 million.
DTC same store sales at Rip Curl grew 1.3 per cent, excluding its fellow multi-brand business Ozmosis.
Gross margin for Rip Curl increased 1.1 per cent of sales, as a result of favourable channel mix and strengthening exchange rates across key markets and input costs.
KMD’s smallest subsidiary, Oboz, reported a total sales lift of 3.8 per cent to NZ$79.5 million in FY26, with its gross margin lifting by 7.3 per cent of sales, reflecting favourable channel and product mix plus one-time tariff refunds of NZ$4.3 million.
The comp sales growth for FY26 shifted slightly in early FY27, with Kathmandu reporting DTC same store sales growth of 7.4 per cent in the seven weeks between July 27 and September 13, while Rip Curl DTC same store sales lifted by just 1 per cent.
KMD also confirmed that, following a comprehensive business review launched in May 2026, the board has taken steps to simplify the group and improve its financial flexibility — including divesting its Southeast Asian manufacturing facility, retaining and continuing to rationalise Rip Curl's Ozmosis retail chain after testing external interest, and offshoring select shared services.
The board also confirmed it has received a number of indicative, non-binding external approaches during the review and will continue engaging with a limited number of these parties, while stressing no decision has been made and no transaction is certain.
It said this process does not change the group's strategy or day-to-day priorities, with management remaining focused on the FY27 plan, profitability, cash generation and deleveraging, and that it will update the market as required under its continuous disclosure obligations.
KMD Brands group CEO and managing director Brent Scrimshaw said FY26 was a year of significant change for KMD Brands. He spotlight that all three of its key subsidiaries returned to revenue growth in the last financial year, adding to an underlying EBITDA growth of 138 per cent to NZ$42 million.
“At the same time, our brand and product-led offence recentred our focus on the consumer, creating stronger innovation pipelines and a more agile approach to meeting evolving consumer needs,” Scrimshaw said.
“The progress achieved during FY26 reinforces our belief that there is substantial potential within the business. We have strengthened our foundations, improved our earnings profile and created a more focused organisation. While there is more work to do, we enter FY27 with clear priorities and growing momentum.”
Group chairman Philip Bowman added that the board's priority is maximising shareholder value.
“While management remains focused on improving profitability, generating free cash flow and reducing leverage through the execution of Next Level, the board will continue to carefully assess opportunities that may accelerate the realisation of shareholder value.”
On the balance sheet, KMD reported a net debt of NZ$48.1 million, which is down by NZ$4.7 million year-on-year. This was driven by the benefit of its NZ$61.9 million net equity raise proceeds being offset by working capital phasing at July 31, 2026.
The constant currency impact of the weakening NZ dollar year-on-year on net debt was NZ$7.3 million.
KMD also issued guidance for FY27, including targeting revenue of NZ$1.055 billion to $1.075 billion, EBITDA of between NZ$52 million and NZ$55 million, and capital expenditure of between NZ$15 million and NZ$16 million.