KMD owns well-known brands including Kathmandu, Ripcurl and shoe brand Oboz. Photo / RNZ, Nate McKinnon
KMD owns well-known brands including Kathmandu, Ripcurl and shoe brand Oboz. Photo / RNZ, Nate McKinnon
Kathmandu parent company KMD Brands has posted a solid start to the 2026 financial year, with Black Friday and Boxing Day sales helping to lift the group’s expected underlying earnings for the first half.
For the five months from August to December 2025, KMD Brands reported total group sales upby 7.9%, driven by a strong 12.9% increase in sales for Kathmandu.
Rip Curl and Oboz also reported positive starts to the financial year, up 5.6% and 4.5% respectively.
For the period from November 1 to December 31, 2025, Oboz was the standout with sales lifting by 21% compared with the same time in 2024.
Kathmandu was also strong, with sales during the period up 12.1%, while Rip Curl reported a more modest increase of 4.4%.
Same-store sales for the first five months were up 1.7% year-on-year for Rip Curl, with strong same-store sales results for North America.
Kathmandu same-store sales were up 12.7% year-on-year, driven by continued momentum in Australia and New Zealand.
KMD Brands group chief executive and managing director Brent Scrimshaw said he was pleased with the group’s early progress of its transformation strategy.
“Whilst we are still at the early stages of our transformation, we are encouraged by the improved performance of Kathmandu, with an adjusted flow of fresh innovation planned in the second half, which we believe will strengthen our ability to expand gross margin over time,” Scrimshaw said.
“We continue to focus on optimising the balance between sales and gross margin while actively managing our inventory investment.”
KMD Brands director Brent Scrimshaw is continuing with his "Next Level" transformation strategy to turn around the business.
Group gross margin in the year to date is 56.7%, roughly 100 basis points lower year-on-year due to the elevated level of promotional activity in the market, although it remains above the gross margin reported in the second half of last year.
A continued focus by all the group’s brands to mix and sell through aged inventory is contributing.
The group is expecting its first-half underlying earnings before tax, interest, depreciation and amortisation (ebitda) to be in the range of $8 million to $11m, more than double what it made in the same period last year.
Alongside the update, KMD Brands said that it has extended its existing debt facility term to April 2027.
The group has also adjusted the fixed-cover charge ratio for the July 2026 and January 2027 measure periods with no restrictions in place.
KMD Brands reduced its total syndicated bank facilities to approximately $283m, and expects to comply with all amended covenants at the January 2026 measure point. It is in discussions with lenders on the refinancing of its long-term debt facilities.
The group expects net debt as of January 31, 2026 to be in the range of $85m to $90m, roughly $10m higher than the year prior, due to the weakening of the New Zealand dollar year-on-year.
KMD Brands will release its results for the first half of the financial year ended January 31, 2026 on March 25.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
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