What is propelling Kathmandu Holdings (NZX:KMD) shares toward upward trend?

Summary

  • In April 2020, Kathmandu swiftly responded to coronavirus situation and raised $207 million of equity to solidify its balance sheet.
  • The Company’s aim is to attain as many of the sustainability goals stated by the United Nations as possible.
  • In September 2020, while comparing FY20 to FY19, the Company noted the online sales for Kathmandu were up by 67%, reaching N$80.9million.

The global retail company, Kathmandu Holdings Limited (NZX:KMD) deals with travel and outdoors adventures, and  has done well in the recent months despite the uncertainties brought about by COVID-19.

Image Source: Shutterstock

Stock Performance

On 20 January 2021, at the time of writing, Kathmandu was trading up by 0.74% at a price of NZ$1.36.

The stock has given a return of 175.51% in last 11 months period, between hitting its lowest at NZ$0.49, nosediving by 49.10% on 23 March 2020 to close at NZ$1.35, 3.05% higher from its previous close, as on 19 January 2021.

Highlights from Annual Report

As per KMD’s annual report closed 31 July 2020, there was a rise in Group sales by 48.7%, to NZ$801.5M. In April 2020, Kathmandu swiftly responded to coronavirus situation and raised $207 million of equity to solidify its balance sheet. The organisation diversified its interests by acquiring an entity called Rip Curl, which is a well-known surf brand in 2019 and Oboz in 2018.

Sustainable approach

According to the sustainability report released by the Company in October 2020, its vision for the next 5 years was to leave a minimal carbon footprint on the planet. Saving water, recycling bottles (30,423,221 plastic bottles since 2015), and using organic resources to create products, are some of the ways, through which, the Company is contributing towards a sustainable way of existence.

Manu Rastogi, Head of Product, Innovation and Product Sustainability, revealed that during the COVID-19 times, the Company’s aim was to focus on the quality of work rather than the quantity. He further added that all hands-on deck were required to come of the pandemic, similarly the difficulties faced by the textile industry required the equal contribution of everyone around.  

The company’s aim is to attain as many of the sustainability goals stated by the United Nations as possible.

Image Source: Shutterstock

People want more than just an exclusive product these days. It has been witnessed that more and more people are becoming interested in buying products of the companies which give something back to the environment. Kathmandu Holdings aims at tapping the opportunity to its benefit and creating products that are sustainable and have a minimal carbon print.

How did the Company fare in 2020?

As stated in September 2020, even though Kathmandu witnessed low rates of growth due to the lockdown, its balance sheet was strong, the debt rate was low, and the inventory was well stocked up.

While comparing FY20 to FY19, it was noted the online sales for Kathmandu were up by 67%, reaching N$80.9million. The statutory NPAT was stated as NZ$8.9M, while the operating cash flow stood at NZ$93.1million, which was up by 50.9%. There was NZ$207 million capital raised whereas closing net debt was recorded at NZ$9.4million.


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