Kathmandu first quarter sales driven by Rip Curl

Kathmandu group sales increased 72 per cent on the same time last year. Photo / File

Outdoor clothing and equipment retailer Kathmandu is reaping gains from its acquisition of surfing brand Rip Curl.

Kathmandu group sales for its first quarter ended October 31 increased by 72 per cent of the same period a year earlier.

In a trading update released to the NZX this morning, the group said its earnings from the period were boosted by the "transformational acquisition" of Rip Curl.

It said its sales had continued to be impacted by Covid-19 in the period.

Group online sales were up 37 per cent in an extended period of 16 weeks to November 15, while wholesale sales for the first-quarter period ended October 31 were down 14.4 per cent on the same time last year.

It noted that 60 of its Greater Melbourne stores had been closed for most of the quarter and 14 Auckland stores were closed for over two weeks during the period.

Airport stores in Australia, as well as Rip Curl stores in Hawaii and Europe, were still heavily impacted by travel restrictions and government-mandated lockdowns and closures, it said.

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The company said its EBITDA for the first quarter was "in line with last year", which included government subsidies and the realisation of cost synergies.

Group chief executive Xavier Simonet said the group was beginning to reap the benefits of a diversified group following a strong performance for Rip Curl and successful winter trading for Kathmandu.

"Rip Curl's strong sales performance in its key markets of Australia, Europe and North America is very pleasing. It highlights the strength of Rip Curl's global brand and innovative products as more people take to surfing. At broadly pre-Covid-19 levels, wholesale sell-in for Rip Curl for the second half-year is also encouraging," Simonet said in the market update.

"As for Kathmandu, camping and footwear categories have over-performed, but have not compensated for the impact of Covid-19 with low footfall in CBD and tourist locations as well as lower travel-related purchases."

Simonet said Oboz's performance had been "robust" and the order book was tracking above pre-Covid levels.

He said the group's half-year result would be dependent on the key Christmas trading period, and warned that the impact of Covid-19 on consumer sentiment remained a risk.

"The Group continues to maintain a strong balance sheet and liquidity position, allowing it to respond to current trading conditions and pursue attractive growth opportunities that may arise. The Group intends to resume dividend payments subject to market conditions and trading performance following first-half results," he said.