Kathmandu climbs to 4-month high on upgraded profit outlook

Kathmandu shares jumped 17 per cent.

Kathmandu Holdings' shares jumped to their highest level since April after the retailer said annual profit rose as much as 13 per cent on faster sales growth across the Tasman and new contributions from its Oboz Footwear acquisition.

The outdoor equipment chain said normalised net profit was $55.5-$57 million in the year ended July 31, up from $50.5 million a year earlier, with total sales up 9.6 per cent at $545 million.

The audited results will be released in September. Same-store sales increased 0.6 per cent on a constant exchange rate basis as a 2.7 per cent increase in Australia offset a 3.9 per cent decline in New Zealand.

"We were particularly pleased with the second half performance in Australia, given we were cycling strong growth in our key winter period last year. New Zealand conditions were challenging," chief executive Xavier Simonet said.

"Oboz, acquired in April 2018, continued to deliver strong sales and ebit (earnings before interest and tax) growth in 2H, with continued progress anticipated in FY2020 and beyond."

Kathmandu's second half showed Australian same-store sales growth accelerating from 1.2 per cent in the first half, whereas New Zealand same-store sales deteriorated from their flat level.

The earnings outlook was better than Forsyth Barr analyst Guy Hooper's prediction for normalised profit of $53.2 million, although revenue lagged behind his forecast of $553.9 million.

Kathmandu shares jumped 17 per cent to $2.45, but are still down 11 percent so far this year. Kathmandu has been a laggard among listed retailers, with Hallenstein Glasson shares up 28 per cent so far this year, Warehouse Group up 12 per cent, Briscoe Group increasing 3 per cent, and even perennial straggler Smith City Group only down 1.8 per cent.

That hasn't deterred Accident Compensation Corp's investment team from taking a substantial shareholding in the retailer, with the state-owned workplace insurer lodging a notice of its 5 per cent stake on July 31.

The retailer also said net debt was $19.2 million at July 31, down from $31.4 million a earlier.