KMD (ASX:KMD) reports record group sales in FY22

Highlights

• KMD Brands’ shares were heading south today (17 November), down 0.500% at 11:38 AM AEDT.
• The company’s group sales reached a record high of NZ$980 million in FY22.
• During Q1 FY23, KMD’s Kathmandu operation achieved 107.2% sales growth.

Shares of New Zealand-based apparel company KMD Brands (ASX:KMD), formerly known as Kathmandu Holdings Limited, traded 0.500% lower on the ASX today. One share of KMD Brands was priced at AU$0.995 as of 11:38 AM AEDT, 17 November.

On 16 November, KMD released the results of its annual shareholder meeting along with the Q1 FY23 trading update. The company reported record group sales for FY22 despite being heavily affected by COVID-19 lockdowns in Australasia. Additionally, the first quarter of FY23 started on a good note for KMD Brands; total group sales grew by 61.8% compared to Q1 FY22.

While KMD’s shares were declining today, the ASX 200 index gained 9.70 points, totalling 7,131.90 points at 11:38 AM AEDT.

A glance at KMD’s annual shareholder meeting results

• In FY22, KMD Brands reported record sales across all three brands, including Rip Curl, Kathmandu, and Oboz.
• As per the ASX filing, Rip Curl sales increased by 9.5%, totalling NZ$536 million in FY22.
• During the last quarter of 2022, Kathmandu recorded its highest-ever sales, gross margin, and earnings.
• At the same time, Oboz experienced record order demand during FY22 due to constrained supplier capacity expansion after the effects of COVID.
• The second half of FY22 was relatively good for KMD Brands, resulting in record 2H group sales and underlying EBITDA, as mentioned in the ASX report.
• Despite experiencing pressure from rising raw material prices and increased international freight costs during FY22, KMD Brands was retained its gross margin.
• FY22 brought a digital transformation in KMD’s ecosystem; online sales jumped over 19%, including 16% in direct-to-consumer (D2C) sales.
• KMD increased its spending in brand marketing and ESG by NZ$18.6 million year-on-year (YoY) due to its focus on organic brand growth during FY22. Following this, KMD also made a strategic inventory investment for establishing temporary stock positions.
• The company announced a record dividend payout for its shareholders, returned NZ$43 million in FY22.

What’s in KMD’s Q1 FY23 trading update?

The company informed the market about its Q1 FY23 trading performance; below are the key takeaways:

• In Q1 FY23, total group sales increased by 61.8% compared to the first quarter of FY22. This surge, according to the company, is a result of the end of Australasian lockdowns and the return of more regular trading cycles.
• As per pre-COVID data, total group sales saw an increase of 17.5% compared to Q1 FY20.
• KMD’s underlying operating profit has seen an improvement of nearly NZ$30 million YoY for the quarter ended on 6 November 2022.
• While the Kathmandu division witnessed 107.2% sales growth in Q1 FY23, Rip Curl sales increased by 29.7% (D2C store sales).
• The third group brand Oboz generated record wholesale and online sales during the first quarter of FY23.

In a statement, Michael Daly, group CEO and managing director of KMD said:

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Data Source: Company announcement dated 16 November 2022