Today, retailer Kathmandu Holdings Ltd (ASX: KMD) reported its FY21 results, which saw its shares finish 1.4% lower by the end of the day.
The pandemic has not been kind to Kathmandu. With travel restrictions still in place in its key markets of Australia and New Zealand, demand for travel related products continues to be dampened.
FY21 results
The following figures are all underlying so they’re comparable to FY20 where the impact of IFRS 16 is excluded.
Group revenue came in slightly below guidance figures at $922.8 million, compared to $801.5 million in FY20.
Rent abatements with landlords and other synergies saved the company around $15 million for the year. Operating expenses (Op ex) were 46.4% of sales, down from 47.9% in FY20.
EBITDA came in under guidance at $113.3 million, still an increase of 35.9% on FY20.
Net profit after tax (NPAT) jumped 110.2% to $66.3 million.
Segment results
Kathmandu’s Rip Curl brand was the star performer throughout FY21. A busy summer season in its key markets of North America and Europe saw sales reach $490.4 million, up from $315.7 million. Rip Curl was owned for a full twelve months in FY21 compared to nine months in FY20, however.
Management noted sales are back to pre-COVID levels, despite store closures in airports across Australia, Hawaii, Asia and parts of Europe.
The Kathmandu brand struggled during FY21, with sales down 17% to $354 million. There were over 5,100 lost trading days during the period across Australia and New Zealand, and 6,850 the year before.
As for its footwear band Oboz, sales jumped 44.9% on a constant currency basis on the back of strong hiking participation.
Gross margins were impacted by increased freight costs, but this is expected to normalise eventually.
Summary
I imagine there’s a potential reopening play for the Kathmandu brand as international travel resumes in Australia and New Zealand.
The growth of Rip Curl is also promising. Having a portfolio of brands across more seasons should result in less cyclical earnings.
For more reading into Kathmandu shares, click here to read: Kathmandu (ASX:KMD) shares continue to be hard climb
