KMD Brands has recorded strong sales growth across all its brands in Q1 FY23, with the CEO and MD Michael Daly remaining cautiously optimistic for the months ahead.
KMD Brands owns and operates Kathmandu, Rip Curl and Oboz.
“Pleasingly, gross margin and profitability are holding up well, with group underlying operating profit for the first quarter of FY23 improving by nearly $30 million year-on-year,” Daly said.
“Looking forward, while current trading for our three brands is strong, we remain cautiously optimistic, with the potential of high inflation and rising interest rates impacting consumer sentiment in our key global markets.
“As always, the first half year results remain dependent on the key Black Friday and Christmas retail trading periods still to come.”
According to figures released today, Group total sales were up 61.8% above Q1 FY22, which is reportedly due to the removal of lockdowns and restrictions seen this time last year.
The Group sales are also up 17.5% above Q1 FY20.
DTC same store sales growth for the 14 weeks up to November 6, 2022 saw Kathmandu up 107.2% and Rip Curl up 29.7%.
KMD also reported that Oboz achieved record Q1 wholesale and online sales, with supply no longer a constraint.
In July, Daly noted that Oboz was on track to resolving this issue after disruptions to its supply chain due to the pandemic.
“Oboz is recovering from the three-month COVID closure of Vietnam factories in the first half, compounded by shipping congestion and international freight delays,” Daly had said.
In a statement at KMD’s annual shareholder meeting today, Daly further noted that the group has a set of strategic priorities going forward for FY23.
“We will continue to build global brands, with the full rollout of our Rip Curl membership program in Australasia,” Daly said.
“We will build on the initial success of Kathmandu’s international launch into Europe and Canada, with plans for future launch in the USA.
“Oboz will continue to expand its distribution through connections with new consumers, and exciting new product ranges.
“We will elevate digital through the continued global rollout of our new Group-wide loyalty management, customer data and online trading platforms across all brands.
“We will launch Kathmandu online sites in Europe and Canada, relaunch the Kathmandu loyalty program with an exciting new value proposition, and build out Rip Curl and Oboz’s B2B dealer platforms.”
He also said that KMD will leverage its operations through merging its Canada and UK fulfilment centres across all brands.
“Kathmandu will also leverage our existing Rip Curl infrastructure as it continues to expand internationally,” he continued.
“Lastly, we will continue to lead in ESG, as we progress towards B Corp certification across all of our brands.
“Rip Curl will roll out its TerraCycle wetsuit take-back program globally, Kathmandu will launch a trial take-back and renewal programme, and Oboz’s innovative use of bio-based alternatives to EVA midsoles will continue to reduce our carbon footprint.”
Reflection and new appointees
Meanwhile, KMD Brands Chairman David Kirk also made a statement today about its FY22 results in the Group’s annual shareholder meeting.
Kirk said the Group will continue to invest in its brands through digital infrastructure, store network, and its people.
“Two of our strategic pillars are to build global brands and lead in ESG, and in FY22 we increased our investment in brand marketing and ESG by $18.6 million year-on-year,” he said.
“The directors announced a record dividend payment for FY22, distributing $43 million to shareholders.
“FY22 was Michael Daly’s first full financial year as Group CEO. He has led the organisation with energy and passion since taking on the role.
“Michael has established a small, high-quality Group office in Melbourne and has played a very hands-on role in the development of the next stage of growth for Kathmandu.”
Kirk also noted new appointees for the year, including Abby Footen who became the Chair of the Audit and Risk Committee.
He also noted that John Harvey will step down as director at the end of November after 11 years in the role.
“As you would expect, we have been searching for a Non-Executive Director to succeed John and, as recently announced, we are delighted that Zion Armstrong has agreed to join the board from 1 December 2022.
“Zion has had a very successful career in the global branded sportswear industry. Zion spent 24 years with Adidas, stepping down as President - North America in early 2022.
“Zion’s experience in the North American and Asian markets, and proven capability in global brand management, product development and multichannel distribution, is a perfect fit for the next stage of growth for KMD Brands.”