Outdoor clothing and equipment retailer Kathmandu's sales were up 16 per cent to $56 million for the 15 weeks ended November 13, though its first-half profit result will be almost entirely dependent on Christmas and January trading, chief executive Peter Halkett told the annual shareholders' meeting.
In constant currency terms, sales were up 18 per cent. Sales in the same period a year earlier accounted for 17 per cent of total annual sales.
Sales through stores open 12 months or more were up 7.6 per cent or 9.2 per cent in constant currency terms. The same-store sales increase in the first 16 weeks of the previous year was 2.1 per cent although limited inventory availability constrained the year-earlier sales, Halkett said.
"Retail conditions have continued to be challenging," he said. "There are very few significant economic indicators suggesting improvement is coming in the short term."
Halkett said it's unlikely retail conditions will improve in the short term and there is probably more downside than upside risk.
"Operating costs such as rent and payroll increases are generally outpacing retail sales growth, especially in Australia," he said.
The company is also facing increasing regional and global competition.
"Volatility and unpredictability is becoming the norm, which means providing forward guidance is not appropriate."
Still, Kathmandu is planning for continued growth and remains positive about the full-year outlook.
Since August 1, the company has opened new stores in Coastlands near Wellington, at The Palms in Christchurch and relocated its Camberwell store in Melbourne, taking total store numbers to 113.
It plans to open a new store in Warrnambool in Victoria and is relocating its Chatswood store in Sydney and its Willis Street store in Wellington before Christmas.
Kathmandu still aims to open 15 new stores during the current year and two further new Australian stores are scheduled to open early next year and a number of other sites are under negotiation, Halkett said.
Kathmandu shares are unchanged at $2.57, below their record at $2.66 since listing a year ago. The shares have risen from $1.89 in August.