NZ-based retailer of outdoor, travel, and sporting clothes and equipment, KMD Brands [ASX:KMD], reported a total sales growth of 15.6% in Q3 FY2023.
The group revealed that it has found solid sales growth across all its brands in the latest quarter. Main brands include Rip Curl — delivering sales growth of 7.9% — and Kathmandu — scoring 11.3% growth. Oboz was also up a huge 120.3% in growth.
The share price for KMD had risen by 3% at lunchtime — worth $1.06 a share at the time of writing.
It has gone up by more than 10% so far in 2023, and it near tied with the S&P 200:
Source: TradingView
KMD Brands gives the run-down on sales growth in Q3
The results for KMD Brands were described as solid — particularly as Rip Curl makes up around 52% of group sales, with Kathmandu turning out about 40% of sales and Oboz around 8%.
KMD said its gross margin has remained resilient throughout the quarter. It’s currently gearing up for a key Q4 where it said it will capitalise on the winter season for Kathmandu clothing and merchandise in the Southern Hemisphere. For Rip Curl and Oboz, in the Northern Hemisphere’s summer.
The group also said that it’s in a good position to benefit from the return of international travel and returning tourism as the world officially opens after COVID-19 restrictions continue to ease.
This has also caused the group to ramp up investments in the long-term international expansion of its brands, in which the group plans to roll out a dozen more stores for Kathmandu this year.
There will also be another ten stores planned for Rip Curl across a three-year expansion schedule, as well as required refurbishments for the brand’s image.
While the group did post some positive increases and clear growth in Q3, there were also some differences to be found in consumer spending patterns.
This was most obvious in the group’s leading surf brand, Rip Curl, with its 7.9% sales increase in the quarter showing a slower movement in comparison with the 15% growth over the nine months ending in April this year.
The group’s CEO and Managing Director, Mr Michael Daly, expressed his own understanding that Oboz sales could reach $150 million over the medium term — much higher than its current US$54 million result.
In the US, however, Rip Curl was said that it could alone hit NZ$200 million in sales from NZ$146 million based on current trends and with the US’ summer on the horizon.
Mr Daly said that it is time to go for that international push with its Kathmandu brand — now that the macro environment is shifting for the better. However, he says that the group will keep a modest medium-term turnover target of NZ$100 million for now.
Source: KMD
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For Money Morning
