Kathmandu Holdings' total group sales for the 10 months ended 31 May were 15.1% below the comparable period last financial year, the Group has revealed in a trading update.
However, since the stores have begun to reopen, the in-store and online sales have generally exceeded management's expectations, the business said.
Rip Curl's same store sales were up 21% for the last six full weeks from 18 May to 28 June 2020.
This reflects retail stores up 5.1% and online up 151%. Online contributed 22.6% of direct to consumer same store sales.
Meanwhile, Kathmandu's same store sales were up 12.5%, reflecting retail stores up 2.2% and online up 78%.
For Kathmandu, online contributed 21.4% of direct to consumer same store sales.
However, despite these positive results, the Group's wholesale business has been substantially impacted.
The Group reports that for Rip Curl specifically, global wholesale sales were 26% below the comparable seven-month pre-ownership period last financial year.
The business said that due to the ongoing COVID-19 disruption impacting the Group's wholesale customers and the timing of seasonal range releases, it is too early to assess the medium-term impact on wholesale demand.
Kathmandu Holdings CEO Xavier Simonet said that the business remains poised to respond to changing conditions.
"Whilst we are pleased with the strong recovery in direct to consumer sales over the past six weeks, we remain cautious about medium-term levels of consumer demand.
"We believe that some short-term factors, including Government support packages and pent up demand are underpinning current sales.
"The heightened level of uncertainty that currently exists is likely to persist over the medium-term, and we are focused on being well prepared to respond to the associated risks and opportunities as they emerge," he said.
During the period, the business also completed a successful NZ$207 million equity raising to strengthen its balance sheet and liquidity position during the pandemic.
Based on the Group’s current assessment of the operating environment and outlook, available liquidity in excess of $300 million is expected at the end of this financial year.
Overall, the business expects FY20 adjusted EBITDA to be above $70 million.
Kathmandu's gross margin is expected to be at the lower end of the 61% to 63% target range.
The business remains prepared for future economic conditions including when Government support finishes, further outbreaks (such as that observed in Victoria) and the impact of low foot traffic at CBD and tourist located retail stores.
Simonet added that he was thankful to his team for being able to adapt to the challenging conditions.
"I want to again acknowledge the incredible effort and dedication of our teams.
"Our supply chain, offices, and customer facing teams have worked tirelessly to adapt to the extraordinary challenges we have faced, while continuing to put our customers first," he said.