Kathmandu owner KMD Brands have nearly doubled its full-year loss. Photo: RNZ / Nate McKinnon
Kathmandu owner KMD Brands have nearly doubled its full-year loss, with the company's margins coming under pressure as it tried to win sales in difficult trading conditions.
Key numbers for the 12 months ended July compared with a year ago:
- Net loss $93.6m vs $48.3m loss
- Revenue $989.0m vs $979.4m
- Underlying loss $28.3m vs $1.1m loss
- Underlying operating earnings $17.7m vs $50.0m
- Gross margin 56.5 percent vs 58.4 percent
- No dividend
KMD Brands also operates the Rip Curl and Oboz brands.
Group sales increased modestly, with Rip Curl and Kathmandu seeing slight growth, and Oboz saw a small sales decline.
"The group gross margin declined in FY25 reflecting greater promotional activity, which was required to maintain market share in a highly competitive trading environment," the company's leaders David Kirk and Brent Scrimshaw said in a joint statement.
The "difficult trading conditions" and heavy promotional activity also led a 65 percent drop in underlying operating earnings.
KMD said its balance sheet was in "good shape" with $235 million in available headroom.
The company recently announced a major restructure, which would see 21 stores shut down across its global network of stores, and $25 million in savings.
Looking ahead, KMD said inflationary pressures were beginning to ease, but consumers remained cautious.
"We expect these conditions to persist in the near term and are planning accordingly," it said.
"Our focus remains on returning to sales growth and improving profitability."
KMD's board was "fully committed" to its restructuring strategy and its ability to self-fund key initiatives.
"We recognise the seriousness of the decline in our share price and the impact this has had on shareholder value," KMD said.
"The board is committed to taking decisive and sustained action to improve financial performance."
In an encouraging sign, KMD said its total August sales were 10.5 percent higher than last year, with Kathmandu up 19.4 percent year-on-year.
The company targeted group gross margin in the first half of the 2026 financial year to be slightly above the second half of its 2025 year.
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