KMD Brands (formerly Kathmandu Holdings) has revealed the impact Australasian lockdowns and Vietnam factory closures had on its operations during the first half of FY22.
The Rip Curl and Kathmandu operations suffered under the lockdowns imposed across Australia and New Zealand in the half, while Oboz's factory closures in Vietnam saw it unable to fulfil 50% of its orders.
These factors led the business to report a net loss of $5.5 million for the first half.
The Group's revenue also declined, slipping 0.8% to $407.3 million compared to $410.7 million in H1 FY21.
Additionally, underlying EBITDA slipped to $10.2 million from $48.2 million in the first half of FY21.
However, KMD Brands Group CEO Michael Daly (pictured) said that despite the challenges the group endured in the half, it still achieved key goals.
"We continued to deliver on our strategic objectives, positioning KMD Brands for growth as travel rebounds globally and COVID-related impacts on supply abate.
"We maintained a strong focus on building our global brands, sponsoring the first ever World Surf League finals, with the men’s event won by a Rip Curl surfer.
"We opened twelve new owned/licensed retail stores globally, and online sales increased to 17.4% of direct-to-consumer sales, rewarding initiatives to elevate digital capabilities.
"Substantial progress was also achieved on our ESG strategy," he said.
When it comes to the individual brands, KMD Brands reported that Rip Curl's result was underpinned by online and wholesale growth, Kathmandu's sales rebounded in Q2 while Oboz's was impacted by unprecedented supply chain challenges.
Rip Curl reported total sales up 2.7% for the half to $257.8 million, with the European and Hawaiian markets performing well for the business.
Online sales jumped up 14.5%, accounting for 13.8% of DTC sales in the half.
Meanwhile, wholesale sales for Rip Curl were up 16.1%.
Looking at Kathmandu, lockdowns and travel restrictions pushed the brand's total sales down 0.8% to $128.3 million in the half.
However, the brand's online sales witnessed strong growth in the half, lifting 46.4% and making up 21.2% of sales in the half.
Lastly, with factories closed, Oboz's wholesale and online sales suffered immensely, with sales declining 30.2% to $21.1 million in the half.
In addition, Oboz's gross margin was impacted by significant international freight costs averaging more than 300% over
the historical average.
Daly added that while the business is still navigating the COVID challenges, the business is anticipating a positive second half.
"Forward demand for our Rip Curl and Oboz products remains at record levels, and Kathmandu enters the traditionally strong winter season well prepared," he said.
"We will continue to invest in building our global brands in the second half, with the launch of Kathmandu online sites in Europe and Canada and the merging of Canada and UK fulfilment centres for all brands.
"We remain focused on several key initiatives to elevate our digital capabilities, with the Club Rip Curl loyalty scheme due to launch in the second half.
"In addition, we will relaunch Kathmandu’s Summit Club, with an exciting new value proposition.
"I am excited by the opportunities we have to build our portfolio of brands under our new parent company KMD Brands," he said.
KMD Brands ended the half with net debt position of $48.6 million, with funding headroom of approximately $250 million.
KMD Brands increased its dividend payment by 50% to 3 cents per share, which will be paid on June 30 2022.