The parent company of Kathmandu and Rip Curl has reported a groupwide net loss of NZ$93.5 million (~A$83 million), down 93.7 per cent on FY24.
This is despite KMD Brands also reporting a 1 per cent lift in total revenue in FY25, which is an improvement from its 0.5 per cent sales slip reported in the financial year to May 2025, indicating a sales bump up in June.
Rip Curl, KMD’s largest brand in terms of revenue, led the sales lift in the full year with a sales lift of 2.1 per cent to NZ$550.4 million.This is up from a 0.1 per cent lift in the first half of FY25.
The surfing brand’s direct-to-consumer sales increased 4.6 per cent. According to KMD, this reflects strong flagship store sales growth in the key regions of Australia, Hawaii, Europe and South America, supported by store openings.
Rip Curl’s online sales increased by 10.2 per cent in FY25 to NZ$41.7 million, comprising 12.5 per cent of DTC sales. DTC same store sales (comprising owned retail stores and online) increased 1.2 per cent.
But Rip Curl’s wholesale channel didn’t have the same traction, with sales here falling 2.9 per cent in the year. This is an improvement from a 7.9 per cent fall in the first half.
Sales growth of 1.5 per cent was achieved in the second half of FY25, with KMD citing closeout sales for end of line styles.
Despite the overall sales lift, gross margin as a percentage of sales decreased 0.9 per cent, with DTC channel mix helping to offset the impact of increased promotional intensity in a competitive market, plus clearance of end of line styles.
Over at Kathmandu, the sales lift was softer, rising just 0.2 per cent for the full year to NZ$361.9 million. This is an improvement from an 8.8 per cent fall in sales in the third quarter to a 2.5 per cent lift in sales in the key fourth quarter winter trading period, matched with enhanced promotional activity.
According to KMD, Kathmandu’s Australia sales lifted 0.2 per cent in FY25, with unseasonably warm weather impacting insulation product category sales in the third quarter.
New Zealand sales were down 2.3 per cent on last year, in what KMD called a more challenging consumer environment. But the market swung to green in the fourth quarter, with a 0.6 per cent sales lift.
Online sales for Kathmandu increased by 9.3 per cent overall to NZ$52.1 million, comprising 14.5 per cent of DTC sales.
Same store sales (including online) decreased by 0.2 per cent year-on-year.
“Most product categories achieved sales growth, including Rainwear, Fleece, Baselayer, Knits, and Footwear,” KMD reported. “This partially decreased reliance on insulation, which achieved lower sales YOY especially during a warm third quarter.”
Kathmandu’s gross margin as a percentage of sales decreased by 3 per cent, with KMD reporting an increased promotional intensity and a focus on maintaining market share in a highly competitive trading environment.
“Operating expenses were tightly managed while facing store labour and rent cost pressure,” KMD reported. “Brand marketing investment increased by +NZ$2 million YOY.”
As for Oboz Footwear, KMD Brands’ smaller, predominately wholesale business reported a 3.5 per cent fall in total sales in FY25 to NZ$76.6 million. This, however, is an improvement from a 6.3 per cent fall in the first half.
Online sales increased 18.3 per cent, with KMD noting this grew strongly during key online promotional periods, “reinforcing the growth opportunity for the brand.”
Wholesale sales decreased 5.8 per cent for the full year, improving from a 10.6 per cent fall in the first half.
“Wholesale sales trends improved in the second half with the launch of new season styles for the North American summer hiking season,” KMD reported. “Since the announcement of US tariffs, at-once wholesale demand has softened. However, there has not been a material impact on the FY25 result.”
Oboz’s gross margin as a percentage of sales fell 3.8 per cent, with KMD citing clearance of inventory. Operating expenses were lower than last year due to lower sales volumes, but KMD did report continued investment in brand and digital marketing. Oboz intangible assets have been impaired by NZ$45.4 million.
“This one-off non-cash item does not impact the day-to-day operations of the business,” KMD noted. “This impairment has been excluded from underlying results.”
KMD also shared a trading update for August 2025, confirming sales for the month were up 10.5 per cent above last year.
Kathmandu’s DTC sales were up 19.4 per cent in the seven weeks to September 14 this year, and same store sales were up 22 per cent, with KMD reporting targeted promotional intensity in a competitive trading environment.
Kathmandu’s gross profit dollars for the first seven weeks are up 11.0 per cent above the equivalent period last year. KMD reported that the first seven weeks of the new financial year is a seasonally non-significant period.
Offsetting Kathmandu’s growth, Rip Curl’s DTC sales were down 1.2 per cent year-on-year, with same store sales up 1.5 per cent. KMD noted that wholesale sales trends are improving, but global uncertainty remains. “Forward orders and in-season buying from key accounts support an improving wholesale trend.”
KMD also reported that group gross margin for the first half of FY26 is targeted at slightly above the second half of FY25 “as strategic promotional activity further improves inventory composition ahead of new product launches.”
The impact of US tariffs announced on July 31, 2025 are embedded in Oboz gross margin and are expected to return to FY25 levels in the second half of FY26.
Group operating expenses are planned to be broadly flat before management incentives in FY26, from the FY25 expense base of NZ$541.6 million, with KMD citing cost savings and ongoing investment to drive ‘Next Level’ growth opportunities.
KMD Brands recently completed a restructure of the business, expected to deliver immediate cost efficiencies against a cost reset target of NZ$25 million. Annualised cost savings from the organisational restructure are expected to be NZ$5 million, with a one-off restructuring charge of NZ$2 million.
KMD Brands expects EBITDA margin expansion in FY26, delivering stronger margin expansion in the second half of FY26.
Part of these restructures include the recent announcement of 21 future store closures across the group, with 14 of these stores to close in FY26.
The company confirmed it is committed to opening 6 new stores – including three new Kathmandu flagship concept stores in the first half of FY26 – and will continue to pursue opportunities in line with its new integrated marketplace and store segmentation strategy.
“Since joining KMD Brands what I’ve seen is clear, the potential of our brands is far greater than what we are delivering today,” group CEO and managing director Brent Scrimshaw said. “We are investing in product innovation that continues to ground our brands in technical performance whilst delivering improved speed-to-market, design and style.
“We are also introducing our integrated marketplace strategy which includes the implementation of store segmentation to drive optimisation of our store network.”
Scrimshaw said there is potential for an enhanced digital business which includes a renewed focus on the group’s performance marketing capabilities.
“In addition, following a successful launch in Kathmandu in the fourth quarter of FY25, we are now implementing the Shopify ecommerce platform in Rip Curl and Oboz in the first half of FY26,” he said. “We have recently completed a restructure of the business, designed to deliver immediate cost efficiencies.”