Outdoor equipment retailer Kathmandu is reporting a slowdown in sales growth after a subdued start to Christmas shopping in its Australian market.
The shares fell to a 16 month low on the news.
The Christchurch-based company’s year to date sales rose 14 per cent as at December 21, slowing from a pace of 19 per cent as at November 16, due to lower same store sales in Australia over the past five weeks, it said.
Kathmandu expects Australia to remain tough for some time and is reassessing its sales and pricing strategy for the second half of the 2015 year and beyond.
The shares dropped 6.8 per cent to $NZ2.59, the lowest since August 2013.
“The company will experience a substantial reduction in the gross profit earnings in the pre-Christmas Day trading period compared to the equivalent period in FY2014,” it said.
“Kathmandu anticipates any recovery in trading from now till January 31, 2015 will not be sufficient to make up the shortfall in gross profit experienced to date in 1H 2015.”
In September, the retailer posted a 4.5 per cent decline in annual profit to $NZ42.2 million ($A39.29 million), as earnings were hurt by a warmer start to winter, which dented trading of seasonal goods through a period when it holds one of its biggest annual sales.
A strong New Zealand dollar against the Australian currency, where it generates the majority of its revenue, also crimped earnings.
Australia is the problem child for Kathmandu, with same store sales in New Zealand and the UK tracking ahead of the same period a year earlier, and at similar gross margins, it said.
BusinessDesk
