Kathmandu owner KMD Brands has suffered a heavy loss in fiscal 2026. But the retailer says its turnaround strategy is paying off, albeit there is “more work to do”.

The year has been challenging, with a lengthy capital raise in conjunction with Goldman Sachs and a full-scale business review. The lengthy equity raise, achieved by selling shares at a heavily discounted price, ended with the resignation of KMD chair David Kirk.

The group’s new chair, Philip Bowman, said KMD is open to reviewing takeover proposals.

The company lifted groupwide sales in the 12 months ending July 31 to $847.4 million, a 6.5 per cent increase year-on-year, led by an 11.1 per cent increase at Kathmandu. Rip Curl and Oboz both grew sales by 3.8 per cent.

However, the group recorded a statutory loss of $333.5 million; $317 million of that came from a one-off, post-tax impairment, leaving a $7.2 million underlying loss, inclusive of other minor adjustments.

“The progress achieved during FY26 reinforces our belief that there is substantial potential within the business,” KMD’s CEO and MD, Brent Scrimshaw, said.

“We have strengthened our foundations, improved our earnings profile and created a more focused organisation. While there is more work to do, we enter FY27 with clear priorities and growing momentum.” 

Bowman said the business review has reopened the possibility of a takeover. He told shareholders that uncertainty remains about its future strategy.

“While the group remains focused on executing its ‘Next Level’ strategy, we believe it is appropriate to continue discussions with a small number of parties to determine whether any opportunity has the potential to deliver superior value for shareholders,” he added.

“While management remains focused on improving profitability, generating free cash flow and reducing leverage through the execution of ‘Next Level’, the board will continue to carefully assess opportunities that may accelerate the realisation of shareholder value.”