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SYDNEY, Feb 1 AAP

February 01 2013, 4:17PM

Retailer Kathmandu has shrugged off the tough retail outlook by sharply upgrading its profit forecast, as shoppers' enthusiasm for travel and adventure remains strong.

Kathmandu said it now expects its net profit for the six months to December 31 to be between $NZ9.5 million and $NZ10 million ($A7.71 million and $A8.12 million).

The expected result is up 75 per cent on the $NZ6 million ($A4.87 million) it reported in the previous corresponding half-year period.

Chief executive Peter Halkett said while retailers across the globe were facing tough trading conditions, travel and adventure stores were still doing well.

"Certainly it's a strong category globally and it's a strong category regionally," he said on Friday.

"People are doing a lot more activities. People are certainly travelling more and getting out there and doing more things in the outdoors."

The company said the upgrade was the result of strong sales growth in the first quarter of the 2013 financial year and a satisfactory performance in December and January.

Total group sales for the half year will be about $NZ165.8 million ($A134.57 million).

This compares to $NZ146.7 million ($A119.07 million) in the previous year, an increase of 13.1 per cent.

Comparable sales growth for the 26 weeks to January 27 was 6.1 per cent.

Mr Halkett said consumer sentiment was still hard to predict and therefore he would not be issuing full year profit guidance.

"These days in retail it's very volatile," he said.

"It's up one week, down the next week, it's partly consumer sentiment, partly what happens on the global stage - there's all sorts of things that change customers' attitude and in turn their desire to go out and shop."

Kathmandu's sales in Australia continued to grow at a faster rate than New Zealand where the brand originated, as the retailer looked to take advantage of the larger population here.

"In New Zealand we have 40 stores for four million people and in Australia we have 80 stores for over 20 million people so our penetration rate as far as stores numbers and sales per customer is a lot lower in Australia," Mr Halkett said.

"Over the last few years we've been increasing our profile, our brand spend and we've been increasing our stores (in Australia) so Australia should be growing at a much faster rate than New Zealand."

The company also opened nine new stores in the first half and expects to open a further 15 in the rest of financial 2013.

Kathmandu also expects earnings before interest, tax, depreciation and amortisation the first half to be between $NZ15.5 million and $NZ16.5 million (($A12.58 million and $A13.39 million), up from $NZ12.7 million ($A10.31 million).

Shares in Kathmandu closed up eight cents at $1.85.

By Kylie Williams