The return of travel boosts Kathmandu after heavy COVID hit

Sales at the operator of outdoor clothing retailer Kathmandu hit record levels in 2022 and investors will see an upsized dividend, but the impacts of the COVID pandemic sent the company’s profits sliding.

KMD Brands, which operates the Kathmandu, Rip Curl and Oboz brands, grew group sales by 6.2 per cent for the year to $NZ979.8 million ($868 million), which was a record result for the group.

Sales at Kathmandu and Rip Curl bounced back strongly in the second half as customers returned to travel and outdoor activities.Credit:Kathmandu

However, the retailer’s net profit after tax (NPAT) came in 33.7 per cent lower than 2021, hitting $NZ36.8 million.

Chief executive Michael Daly said the effects of COVID-19 were now largely behind the company, with travel bouncing back and border restrictions softening across the world.

Despite this, Kathmandu and Rip Curl suffered a $NZ35 million hit during the year as lockdowns hit sales.

Footwear brand Oboz also suffered throughout the year after the closure of factories in Vietnam throughout 2021 impacted the company’s ability to meet customer demand.

Sales at Kathmandu and Rip Curl bounced back strongly in the second half as customers returned to travel and outdoor activities. Kathmandu saw its strongest-ever sales in the fourth quarter. Daly said momentum had continued in the first weeks of the new year as shoppers kept spending.

Kathmandu chief executive Michael Daly with the company’s new brand – the business is now called KMD Brands.

“The momentum from the strong final quarter of FY22 has continued. August sales for the Group were up 44.2% on August 2021, and 10.3% above pre-COVID August 2019,” he said.

“Key growth factors in FY23 include strong wholesale demand for Rip Curl, post-COVID tourism and footfall increases, as well as further wholesale expansion to Europe and Canada for Kathmandu.”

It was this growth outlook that lead the company to pay out a record $NZ42.5 million in dividends throughout the year. The full-year dividend is up 20 per cent after the business declared a final dividend of NZ 3 cents per share, bringing the total payout to 6 cents.

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