Kathmandu Holdings has reported that digital sales bolstered its FY20 results, witnessing a 63% increase in group digital sales to NZ$106.4 million over the period.
The acceleration in digital sales saw its eCommerce channel grow to comprise 15.7% of direct to consumer sales (DTC) over the year.
The business' acquisition of Rip Curl proved successful, with the brand's online sales up 52% to NZ$25.5 million, making up 10.6% of DTC sales.
Meanwhile, Kathmandu's digital sales increased 67% to NZ$80.9 million, comprising 18.5% of DTC sales.
Commenting on the results, CEO Xavier Simonet said that the business was able to quickly meet digital demand thanks to its infrastructure.
"It has been a transformational year for us with the acquisition of Rip Curl and we are pleased with its integration into the Group over the last nine months.
"Our omni-channel strategy and infrastructure capacity allowed us to rapidly scale up to meet the surge in online demand from March," he said.
Overall, group sales totalled NZ$801.5 million, up 48.7% for the period, including nine months of Rip Curl.
The business estimates the impact of COVID-19 to total c. NZ$135 million of sales - NZ$80 million in retail and NZ$55 million in wholesale.
To help offset these impacts, the business undertook a NZ$207 million capital raise which saw it end the period with net debt of NZ$9.4 million.
"The Group faced significant unexpected challenges with COVID-19 restrictions and lockdowns," Simonet said.
"We took decisive action early to reduce costs, adjust the operating structure of the business, and raised $207 million of equity.
"These initiatives have resulted in a strong balance sheet and healthy inventory level, which position us well for the future," he said.
The disruption from the virus has carried on into FY21 with sustained lockdowns in Melbourne, Auckland, Hawaii, Bali and airport store closures.
However, the business estimates that demand will return once these markets reopen, based on previous experience with post-lockdown shopping, Simonet said.
"Following the easing of lockdown restrictions, we saw retail sales for Rip Curl and Kathmandu perform strongly in our core markets of Australasia, Europe and California, as consumers trended towards outdoor and recreation activities.
"Both Rip Curl and Kathmandu also enjoyed an exceptional post-lockdown winter sales performance in Australia and New Zealand.
"Despite the challenges posed by COVID-19, the business remains strong financially and operationally.
"The balance sheet was significantly strengthened by the recent equity raise, our brands are well-positioned to capitalise on increased participation in outdoor, beach and surfing activities following the end of the lockdowns, and our investment into omni-channel capabilities allows us to quickly respond to shifts in consumer habits and strong growth in online demand," he said.
Simonet added that the business has four key pillars it will focus on during the COVID-19 recovery.
"Beyond the short-term impacts from lockdowns, our long-term strategy remains unchanged.
"Product innovation, brand differentiation, a key focus on sustainability, and a step change in digital transformation, will enable us to continue answering the needs of our customers and also inspiring them.
"I want to thank our team members and crew worldwide for their outstanding resilience, flexibility and commitment as we addressed the challenges of the global COVID-19 pandemic," he said.
The Group closed out FY20; with an underlying EBITDA of NZ$83.4 million, down 15.3%; an underlying NPAT of NZ$31.5 million, down 44.5%; and, operating cash flow of NZ$93.1 million, up 50.9%.