KMD Brands has reported a 2.1 per cent lift in direct-to-consumer sales at Kathmandu in Australia year-on-year for the first eight weeks of FY25, deviating from a 23.2 per cent fall in New Zealand sales.
This follows a 13.9 per cent fall in sales in Australia for Kathmandu in FY24, and a 15.2 per cent fall in New Zealand.
Altogether, Kathmandu sales overall were down 14.5 per cent in FY24, which hit the single digits in the fourth quarter, improving from a double-digit 11.1 per cent fall in the third quarter.
KMD Brands reported that New Zealand’s sales plunge cycled strong end of line clearance sales last year.
Meanwhile, Kathmandu’s gross profit dollars rose 5.1 per cent year-on-year for the first eight full weeks of FY25.
Rip Curl’s global DTC sales were down 5 per cent for the first eight weeks, cycling a 2.8 per cent fall in FY24. The surfing brand’s total sales decreased 7.3 per cent to $538.9 million, driven by DTC channels and offset by the wholesale channel.
According to KMD Brands, wholesale sales decreased by 13 per cent for Rip Curl, as wholesale accounts continued to reduce their inventory holdings.
Despite the falls in Rip Curl, gross margin increased by 0.5 per cent of sales reflecting channel mix, improved pricing, and exiting low margin business in North America and Europe.
Wholesale forward orders across the group are moderating from double-digit declines in FY24, KMD reported, to single digit declines for the first half of FY25.
The brand is recording order book growth year-on-year for some regions in the second half of FY25, noting that sell-in is not yet complete. Wholesale accounts continue to remain cautious on pre-season commitments.
As for its third subsidiary Oboz Footwear, KMD recorded a 20 per cent fall in total sales in FY24, cycling record sales last year, driven by impacts in wholesale sales.
“Oboz has been impacted by post-COVID industry challenges in the North American outdoor footwear category,” KMD reported. “Participation levels and demand have now moderated, leaving the wider market with higher inventory levels and aggressive promotional behaviour.”
The brand reportedly benefited from a commitment to diversified sales channels, where online sales grew by 31.7 per cent in FY24, with increased traffic, conversion, and strategic promotional activity.
Gross margin also increased by 2.1 per cent of sales with improved channel mix, improved pricing, and new product introductions.
KMD Brands CEO and managing director Michael Daly said he and the team remain cautious on consumer sentiment, given the challenging global macroeconomic environment.
“Global inflationary pressures are easing, but it will take time to directly impact consumer spending,” Daly said.
“In this environment, we are focusing on growing our gross margin, and simplifying our business to drive cost efficiency.
“We remain focused on returning to sales growth and improving profitability in FY25.
“We believe that with our portfolio of iconic global outdoor brands and leadership in sustainability, we remain a unique investment proposition and well-placed for the future.”