Kathmandu full-year earnings rise as much as 36%

Published: Tue 2 Aug 2011 10:23 AM
Kathmandu full-year earnings rise as much as 36%
By Jason Krupp
August 2 (BusinessDesk) - Kathmandu Holdings Ltd., the outdoor equipment chain, said full-year pretax earnings rose between 31% and 36% on new store openings, favourable weather and better inventory management. The shares gained after the announcement.
Earnings before interest and tax were $63 million to $65 million in the year ended July 31, up from $47.9 million a year earlier, the Christchurch-based company said in a statement. Sales rose 25% to $306 million, or a gain of 22% in constant currency terms. Same store sales rose 15.7%.
Kathmandu’s results are “against the general trend for the retail sector this reporting season,” said chairman James Strong.
The retailer counts Australia as its biggest market and sales across the Tasman jumped 26% to A$29.9 million. New Zealand sales climbed 18% to $111.3 million and in the U.K. revenue was down 6.7% to 3.9 million pounds.
"Our key strategies of new store rollout, upgrading of existing stores and ongoing growth in our product range have all delivered increased sales", said chief executive Peter Halkett. "However we also have to acknowledge that autumn and winter weather was overall a positive for us, and we also believe the strong Australian dollar and New Zealand dollar has encouraged growth in travel overseas, which has a flow on benefit for us."
The company is to release its audited results on Sept. 21. The shares rose 1.8% to $2.20 on the NZX today and have gained 22% this year. Kathmandu is rated ‘outperform’ based on the consensus of 11 recommendations compiled by Reuters.
The performance comes as the retailing sector both in Australia and New Zealand struggles with tough operating conditions, with consumers choosing to pay down debt and keep a close watch on their discretionary spending amid the ongoing economic uncertainty, a fact Kathmandu acknowledged.
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