Key Highlights:
- Kathmandu: DTC sales improved in Australia (+4.3% YoY) but declined in New Zealand (-15.4%) due to challenging year-over-year comparisons.
- Rip Curl: DTC outperformed wholesale, with DTC sales down 3.4% and wholesale sales declining 11.2%.
- Oboz: Wholesale sales were 8.5% lower YoY.
- Group Performance: Total sales declined 5.8%, but gross margins improved.
Brand Performance Overview
Kathmandu
- DTC Sales Trends: Positive momentum in Australia offset by weaker performance in New Zealand.
- Profitability: Despite lower total sales (-2.7%), gross profit dollars increased by 3.6%.
- Brand Campaign: Refreshed advertising in Australia is outperforming previous efforts, enhancing brand awareness and consumer engagement.
- Product Innovation: New spring/summer products have received a positive response, reinforcing Kathmandu’s sustainability and innovation focus.
Rip Curl
- DTC Strength: Outperformed wholesale despite a 3.4% YoY decline.
- Wholesale Challenges: Sales fell 11.2%, but forward orders suggest improvement in H2.
Oboz
- Wholesale Decline: Sales were 8.5% lower YoY, with second-half sell-in still underway.
Group-Wide Insights
- Gross Margins: Improved YoY, reflecting effective cost management amidst inflationary pressures.
- Cautious Outlook: The upcoming Black Friday and Christmas periods are critical to H1 results.
- Macroeconomic Concerns: Consumer sentiment remains subdued due to global economic challenges.
Strategic Focus for FY25
- Sales Growth: Driving revenue across all brands through product innovation, elevated branding, and improved consumer engagement.
- Profitability: Maintaining strong gross margins and optimizing cost structures.
- Inventory Management: Focused on reducing inventory and supporting wholesale recovery.
- Brand Positioning: Leveraging Kathmandu’s outdoor credentials and Rip Curl’s consumer-driven sales approach.
CEO Commentary
Michael Daly, CEO of KMD Brands, highlighted the improving trends in DTC performance and brand engagement:
“We’re encouraged by Kathmandu’s strong performance in Australia and Rip Curl’s DTC resilience. Our refreshed advertising and innovative product offerings are resonating with consumers, positioning us well for the key holiday trading periods.”
Conclusion
KMD Brands is navigating a challenging retail environment with cautious optimism. While overall sales have declined, improving gross margins, strengthened brand campaigns, and promising wholesale trends for the second half provide a foundation for growth and profitability in FY25.
