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Ann: FORECAST: KMD: KMD Trading update and 1H 2015 earnings guidance

    • Release Date: 02/02/15 10:09
    • Summary: FORECAST: KMD: KMD Trading update and 1H 2015 earnings guidance
    • Price Sensitive: No
    • Download Document  3.28KB
    02/02/2015 10:09
    REL: 1009 HRS Kathmandu Holdings Limited
    FORECAST: KMD: KMD Trading update and 1H 2015 earnings guidance
    2 FEBRUARY 2015
    Kathmandu Holdings Limited (ASX/NZX: KMD) today advises that total group
    sales for 1H FY2015 will be approximately $179.2 million, compared to $167.6
    million in the prior comparative period, an increase of 6.9%. Same store
    sales growth for the 26 weeks ended 25 January 2015 was 2.8% on a constant
    currency basis (0.6% actual exchange rates).
    This sales result was below expectations, and gross margins for the half year
    will be below the levels of the prior comparative period, particularly in
    Australia. As a result Kathmandu estimates 1H FY2015 earnings performance
    will be in the following range:
    o EBITDA $6.0 to $7.0 million (last year $22.6m)
    o EBIT $(0.2) to $0.8 million (last year $17.6m)
    o NPAT a loss of $(2.0) to $(1.0) million (last year profit of $11.4m)
    Kathmandu's acting Chief Executive Officer Mark Todd said that the Company's
    trading performance during the key Christmas and January period had been
    below expectations. "The reduction in same store sales in Australia
    throughout December and January, and in New Zealand from Boxing Day onwards
    was disappointing", said Mr Todd. The major reasons for the sales shortfall
    over the past two months were:
    o The levels of sales made in the first quarter at reduced prices to clear
    excess stock, particularly in Australia, which has brought about a
    corresponding reduction in second quarter sales and contributed to overall
    lower gross margins across the full period;
    o Sales mix across the Christmas and January period reflected lower than
    expected demand for summer and non-technical apparel categories in
    particular; and
    o Reduced sales levels in New Zealand after Christmas of our cold weather
    apparel categories during an extended period of dry and warm weather.
    Despite slower than expected sales, total inventory levels at end January are
    expected to be reduced relative to the same time in 2014, due to on-going
    improvement in management of seasonal purchasing.
    Kathmandu has critically reviewed the outcome of its recent promotional
    activity and comprehensively planned for upcoming campaigns across 2H FY2015
    in light of the poorer than expected 1H result. "Successful execution of our
    key sales promotions in Easter and Winter are core to our overall earnings
    performance for the full year", said Mr Todd, "as historically over 60% of
    Kathmandu's sales are made in this period and last year over 70% of full
    year's profit was earned in the second half of the year".
    Mr Todd concluded by saying that, "In accordance with our normal practice,
    Kathmandu will not be providing full year earnings guidance. June and July,
    the last two months of the financial year, are the Company's most significant
    and historically most profitable trading period, and it is too early to
    assess a potential outcome from trading at that time".
    Kathmandu's full result for the half year will be released on Tuesday 24
    March 2015.
    Any enquiries re this announcement to:
    Mark Todd, Acting CEO +64212711328
    End CA:00260216 For:KMD    Type:FORECAST   Time:2015-02-02 10:09:00

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