Kathmandu’s giant profit jump

Kathmandu 2Outdoor apparel retailer, Kathmandu has lifted its full year profit by 64.2 per cent to NZ$33.5m, signalling the retailer’s turnaround is in full swing.

The Kiwi-based retailer today announced earnings before interest and tax (EBIT) of NZ$50.9 million for the year ended 31 July 2016, an increase of NZ$17.7 million compared with the prior corresponding period. A final dividend of NZ 8.0 cents per share will be paid, bringing the full year payout to NZ 11.0 cents per share.

Chief Executive Xavier Simonet commented:

“The results for FY2016 exceeded expectations,” said Xavier Simonet, chief executive, Kathmandu.

“Sales growth was achieved at higher gross margins as a result of product newness and careful management of promotional activity. Cost efficiency and improved working capital management have also contributed to a successful FY2016.”

Sales growth was recorded in Australia and New Zealand, assisted by the opening of five new stores, four in Australia and one in New Zealand. UK sales declined for the outdoor clothing brand, with the closure of three stores.

Online sales grew strongly in all countries, with overall growth of 15 per cent resulting in online sales making up 6.9 per cent of total sales.

“Shareholders relied upon our published forecasts of expected growth in earnings in FY2016, and we are pleased to have exceeded those forecasts,” said Simonet.

Simonet also said the retailer will be “exploring opportunities for Kathmandu to further expand into international markets in FY2017 and our profitable Australasian business provides the foundation for this initiative.”

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