Pressure on Kathmandu's new team

A poor Christmas shopping season has pushed Kathmandu into a half year loss. Photo / Chris Gorman

All eyes will be on struggling outdoor retailer Kathmandu tomorrow when it delivers its half-year result.

The retailer has been trying to regain traction in the marketplace after consecutively low sales, predominantly blamed on slow season starts, saw its share price drop from $4 last year to $1.39 last month.

More than a quarter of its market capitalisation - $109 million - was wiped in one day.

Its share price has since bounced back to $1.69 but analysts say they are not expecting a strong result tomorrow.

"It's not going to be a pleasant result," said JBWere equity manager Rickey Ward. "It's going to be confirmation that things are really challenging."

Kathmandu is not the only retailer struggling, with Pumpkin Patch's result last week indicating things were tough, and The Warehouse and Hallenstein Glassons feeling the pinch as well. Unpredictable weather has been an issue for a lot of retailers that had ordered stock for summer and then seen slower sales when summer started late.

Shareholders will be looking to Kathmandu's new management team and chief executive to give some guidance on how the company is hoping to turn things around and whether they have identified any significant factors that had been affecting the company.

Updates on trading in Australia will also be of interest, with several retailers across the ditch saying things had been tough, although the recent exit of Super Retail Group from Australia, seen as a Kathmandu competitor, will likely be a positive for the company.

Most importantly, however, shareholders will be trying to determine whether the negative trend is a result of bad luck, or a structural or management issue, and looking for a higher degree of certainty or comfort that margins will be able to return to where they historically had been.

The full year result will be the biggest indicator of this, when sales figures from the coming three or four months - Kathmandu's main trading season over winter - have passed.