Kathmandu parent company KMD Brands has reported just a 5 per cent fall in overall revenue in the fourth quarter of FY24, improving from its double-digit 11.1 per cent fall in the third quarter, and a 14.5 per cent fall in the first half.
For the full year to July 24, unaudited sales across the board are down 11.2 per cent.
The sales improvement across FY24 is also noted across its three core brands - Kathmandu, Rip Curl and Oboz Footwear.
For the fourth quarter, Kathmandu sales were down just 6.9 per cent, with Oboz down 7.9 per cent and Rip Curl hitting the lowest fall of just 2.4 per cent. Rip Curl has managed to stay within the single digit in revenue fall, with third quarter sales down 7.6 per cent.
Oboz’s drop in sales worsened in the third quarter compared to the first half, peaking at 28.7 per cent before its dramatic improvement.
Meanwhile, Kathmandu sales have fallen from 21.5 per cent recorded in the first half to single digits in the fourth quarter. Australia (down 4.5 per cent) performed significantly better for Kathmandu than New Zealand (down 16.5 per cent) through the key fourth quarter winter trading period.
KMD reported that Rip Curl’s direct-to-consumer sales continued to outperform the wholesale channel. DTC sales for FY24 were down 2.8 per cent below last year’s record sales result, compared to the wholesale channel which was down 13 per cent below last year as wholesale customers continue to reduce their inventory holdings.
Oboz online sales were up 31.7 per cent above last year, however its wholesale sales for FY24 were down 23.1 per cent.
Gross margin across KMD decreased 30 basis points to 58.8 per cent for FY24, driven by increased promotional intensity through the fourth quarter. KMD added that operating costs were tightly controlled, benefiting from restructuring implemented last year, and lower variable costs associated with lower sales.
The group also confirmed that underlying earnings before interest, tax, depreciation and amortisation is expected to be in the range of $49 million to $51 million for FY24.
Group inventory as at July 31, 2024 was approximately $25 million below the same time last year, resulting in net working capital being approximately $21 million lower year-on-year.
Net debt at July 31 was $60 million, with significant funding headroom of approximately $230 million.