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Kathmandu raises full year expectations, commits to workers’ rights

Kathmandu 2Outdoor apparel firm Kathmandu expects full year earnings to rise, after recording increases in revenue and profit in its latest trading update.

Kathmandu sales for the year are up 7.7 per cent on last year, while gross profit margin is 240 bps (2.4 per cent) above last year due, attributed to improved full price sell through, and a higher average selling price.

The New Zealand-based retailer expects full year EBIT to be in the range of NZ$72 to $77 million (last year $57m) and NPAT to be $48 to $52 million (last year $38m).

“Our second half so far has been strong across both Australia and New Zealand, with Australia experiencing double digit same store sales growth,” said Kathmandu’s chief executive officer Xavier Simonet.

“The Autumn season and the start of our key Winter promotion have delivered higher sales and profit than planned.

“The successful launch of innovative new products, enhanced in-store customer experience, inspiring content and engagement on social media and digital channels, have contributed to the performance.”

Workers’ rights commitment

Kathmandu today also announced it has committed to protecting workers’ rights and improving labour standards in its factories across the globe.

The retailer has joined the Fair Labour Association, a non-profit alliance of some the world’s biggest manufacturers of mass-produced consumer items.

The collaboration of universities, civil society organisations and companies – established by President Bill Clinton in 1999 – is dedicated to improving and protecting workers’ rights.

Kathmandu is the first southern hemisphere-based brand to join the group, which includes global giants such as Nike, Adidas, Nestle and Columbia.

Kathmandu’s chief executive officer Xavier Simonet said the company had worked with its suppliers to ensure workers’ rights and safety met FLA standards.

“Human rights is our number one material issue reflecting the very heart of Kathmandu’s values and brand,” he said in a statement on Monday.

The FLA works to ensure goods are produced ethically and the working conditions in member’s factories meet recognised standards.

Member companies submit to independent audits of their manufacturing process, which is described as some of the world’s most stringent for a social compliance program.

Kathmandu’s announcement follows Australia’s move to combat modern slavery through legislation.

The Modern Slavery Act – which is expected to be passed in federal parliament later this year – will require companies to publish when their supply chains use modern slavery as the nation bids to be a world leader in stamping out the practice.

The legislation will tackle forced labour in supply chains, protect vulnerable migrant workers and compensate victims of slavery.

Kathmandu was awarded an A-grade in the 2018 Ethical Fashion Report produced by Baptist World Aid.

According to the FLA website, Kathmandu has suppliers in Israel, China, Taiwan, Vietnam and Indonesia.

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