Kathmandu and Rip Curl have reported double-digit sales growth in the first half of FY23, buoyed by the return to local and international travel across Australia.
Kathmandu sales grew by +51% in 1H FY23 on last year, while Rip Curl total sales grew by +18%, with reported strong growth in direct-to-consumer sales while maintaining wholesale sales levels.
Oboz footwear saw the largest percentage rise in the same period of +124%, rebounding from COVID-related supply constraints on last year.
KMD Brands’ total sales for 1H FY23 are expected to be approximately NZ$546 million, an increase of +34% above 1H FY22. The Group reported particularly positive trading in Australia.
Through January this year, travel and international tourism continued to drive revenue according to KMD Brands, with Kathmandu sales at +52% and Rip Curl at +19% for the month.
According to figures released today by the Australian Bureau of Statistics, travel drove an increase in household spending in December 2022.
ABS head of business indicators Robert Ewing confirmed the double digit growth.
“Household spending on services rose 22.7 per cent compared to December 2021, driven by increased spending on transport (up 31.0 per cent), as air travel demand continued to grow strongly," Ewing said. “In December, all spending categories recorded through-the-year increases, with services showing more strength than goods."
KMD Group's inventory levels remain elevated for 1H FY23, reflecting a decision to temporarily build stock positions to mitigate supply challenges and to support Oboz forward orderbook growth.
However, Kathmandu inventory is approximately $24 million lower than FY22, and the Group’s inventory balance is expected to normalise during the second half as purchase orders align to improved shipping timeframes.
The Group also reports a resilient gross margin overall, with improved gross margin for the Kathmandu brand.
Underlying 1H FY23 EBITDA is expected to be approximately $45 million, cycling $10.2 million EBITDA in 1H FY22, which included $5.1 million of one-off COVID assistance.