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Kathmandu cuts expectations short as lockdowns bite

Outdoor retail group Kathmandu has warned of continued stress in its retail stores caused by the spate of lockdowns around the country, with 40 stores shuttered in NSW and a further 26 closed in Western Australia.

Due to the foreseen impact of the closures, the business has dropped its full-year sales expectations to approximately $930 million and EBITDA to $120 million – signaling a $13 million hit to earnings.

“Covid-19 continues to be a disrupting factor, in particular for Australasia during the key trading period for Kathmandu,” said new group chief executive Michael Daly.

“Excluding these impacts, Kathmandu had a solid start to the winter season, and Rip Curl sales momentum continues.

“Trading conditions in the Northern Hemisphere for both Rip Curl and Oboz are particularly strong across our online, retail and wholesale channels, as our group benefits from a diversified mix of channel and geographies.”

The business has had a rough run during the pandemic, with its net profit tumbling 44.5 per cent last year to $29 million due to its outdoor focus losing relevancy in a world of lockdowns and movement restrictions.

But, as lockdowns ease, the brand tends to see sales rebound as customers want for the outdoors. The business saw sales jump 12 per cent during the first half of FY21, largely off the back of a strong performance from Rip Curl – though even this period was impacted by lockdowns, with 60 stores shuttered in Melbourne, and a further 14 in Auckland.

“Our brands are well positioned [as] people are going to be focused on fitness, health and wellbeing, because Covid-19 has had such an impact on people’s lives that people want to go to the outdoors… and that will define Kathmandu and Rip Curl [next year],” former group CEO Xavier Simonet said last year.

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