KMD
22/12/2014 09:57
FORECAST
PRICE SENSITIVE
REL: 0957 HRS Kathmandu Holdings Limited
FORECAST: KMD: Trading Update 22 Dec 2014
KATHMANDU HOLDINGS LIMITED
ASX/NZX/MEDIA ANNOUNCEMENT
22 DECEMBER 2014
Kathmandu Holdings LTD (ASX/NZX: KMD) advises same store sales and gross
margins in the first five weeks of the company's Christmas sale promotion in
our largest market, Australia, have been below the levels achieved last year.
Same store sales in New Zealand and the United Kingdom are currently up on
the same period last year, at similar gross margins yoy.
At last month's Annual General Meeting Kathmandu advised that YTD FY2015 to
16 November 2014 sales had increased by 18.6% (20.5% at constant exchange
rates). However, because of the reduced same store sales in Australia over
the past five weeks, the Company's total sales increase for YTD FY2015 to 21
December 2014 is now 14.1% (13.1% at constant currency).
Due to both the subdued start to Australian trading in Kathmandu's Christmas
sale promotion, and the reduced gross margins achieved across the full year
to date in Australia the Company will experience a substantial reduction in
the gross profit earned in the pre-Christmas Day trading period compared to
the equivalent period in FY2014.
Kathmandu's three major annual promotions (Christmas, Easter and Winter) do
historically vary in their outcomes between countries and week to week within
the promotion itself, so there is still the potential for improved
performance in the remaining 41 days of trading in 1H FY2015. However, given
the results to date and the widely acknowledged negative consumer sentiment
in Australia, Kathmandu anticipates any recovery in trading from now till 31
January 2015 will not be sufficient to make up the shortfall in gross profit
$ experienced to date in 1H FY2015.
Kathmandu's acting CEO Mark Todd commented that "in Australia, our trading
performance throughout the Christmas period to date has been below
expectations, which is a reflection of negative consumer confidence and a
difficult discretionary retail trading environment. Whilst 1st half earnings
will be down on the result achieved last year, our overall profit result for
the full year remains primarily dependent on second half year trading which
in FY2014 contributed over 70% of our total year's profit. We anticipate
challenging conditions in the Australian market may continue for some time,
and as a consequence, we are reassessing our sales and pricing strategy for
2H FY2015 and beyond".
Further Communication to Market
Kathmandu's result for 1H FY2015 will be released to the market on 24 March,
and a further update on the estimate of this result will be provided in early
February.
For queries contact Mark Todd +64 212711328
Mark Todd
CEO
End CA:00259247 For:KMD Type:FORECAST Time:2014-12-22 09:57:32
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