The company was giving little away about its expectations for the remaining months of its financial year yesterday, but chief executive Peter Halkett said the outdoor apparel market was becoming increasingly competitive.
Kathmandu conducts most of its business during its second half when the firm's crucial Easter and winter sales take place.
Halkett said the company was not providing any guidance for its full-year result as variables such as weather conditions made forecasting Kathmandu's trading performance very difficult.
"There is a relatively wide range of possibilities that means we can actually do quite well this year or if things get really difficult we can do quite poorly," he said.
"Historically, bad weather helps Easter [sales] but there are so many variables and we certainly seem to cop a lot of criticism when we do have an expectation out and fall short of it. Besides the fact that the business is clearly a very good business it seems to cop more [criticism] than it deserves."
Halkett said that since the end of January Kathmandu's same-store sales had been ahead of those in the first half.
"From a market point of view I think we're unlikely to see any significant ... improvement to the current retail conditions in the second half," he said.
Halkett said outdoor apparel was a growing segment of retail and that growth was attracting a lot of competition into the market.
FCO Fishing Camping Outdoors, owned by ASX-listed Super Retail Group, launched into the New Zealand market last August and operates a number of stores in the North Island.
And Halkett said Australasian outdoor retailers Macpac and Mountain Designs, which competed more directly with Kathmandu than FCO, were expanding.
"There's certainly a lot more shops competing in the space," he said. "Clearly that's a headwind we need to battle against."
Kathmandu posted a 15.4 per cent rise in total interim sales to $146.6 million yesterday.
But the company said margins were affected by aggressive promotional and marketing activity that took place during January to maximise profits and reduce excess stock left over from slow Christmas trading.
Half-year net profit plunged 42 per cent on the same period a year earlier to $6 million, well below the $8.3 million forecast by Goldman Sachs analyst Buffy Gill.
The company said its New Zealand operation outperformed Australia in same-store sales growth during the first half, with Australian sales particularly weak in the states not benefiting from that country's resource boom.
Operating costs rose almost 30 per cent to $75 million due to a number of factors including advertising spending.
