Kathmandu shares climbed more than 12 per cent this morning after the retailer detailed strong sales recovery over the past six weeks and said it will stay profitable at an operational level for the rest of the year.

Excluding stores that remain closed, Kathmandu's same store sales rose in six weeks ended June 28 from the same period in 2019 with online channels leading the boom.

Rip Curl sales rose 21 per cent, with online sales jumping 151 per cent. Even its traditional retail stores registered 5.1 per cent growth. The Kathmandu brand lifted sales 12.5 per cent, with online sales up 78 per cent and retail sales up 2.2 per cent.

Online contributes more than 20 per cent of direct to consumer same store sales for both brands. Still, lockdown restrictions have hit the adventure apparel and equipment retailer hard, with group sales down 15.1 per cent in the 10 months ended May 31.


Chief executive Xavier Simonet said he was cautious about medium-term levels of consumer demand despite the strong performance over the past six weeks.

"We believe that some short-term factors, including government support packages and pent up demand are underpinning current sales," he said

Kathmandu shares rose 12.3 per cent to $1.28, trimming its loss so far this year to 51 per cent.

Murky outlook

"The heightened level of uncertainty that currently exists is likely to persist over the medium-term, and we are focused on being well prepared to respond to the associated risks and opportunities as they emerge," Simonet said

Based on current Covid-19 conditions, Kathmandu expects earnings before interest, tax, depreciation, and amortisation to be above $70 million for year ending July 31 — suggesting the second half will be at least $2m given it reported first-half ebitda of $68.3m. Kathmandu reported ebitda of $99.6m in the 2019 July year.

The company said global wholesale of the Rip Curl brand has yet to recover, with sales 26 per cent below the comparable seven months of the previous financial year. The group said it was too early to assess the medium-term impact on wholesale demand.

Due to the $207m of capital raised in April, the group expects to have more than $300m of liquidity at the end of the financial year.

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