The parent company of Kathmandu and Rip Curl has posted a shock $93.6 million statutory loss – its worst in at least a decade.
KMD Brands said when excluding a $45.5 million non-cash writedown of its Oboz footwear business and other items, it still lost $28.3 million on an underlying basis for the year to July 31.
KMD said it was once again not paying shareholders a dividend, as it hasn’t since 2023, and was taking steps to carefully manage capital.
KMD announced earlier this month it was closing 21 stores, mostly outside Australia, out of its global portfolio of 328 company-owned Kathmandu and Rip Curl shops.
The Christchurch-headquartered, dual-listed company said on Wednesday it had also recently restructured its business in a move designed to save $5 million a year.
The 2024/25 results are much worse than those of a year previous, when KMD Brands posted a statutory loss of $48.3 million and an underlying loss of $1.1 million.
Before that KMD Brands had been profitable since at least 2014/15, a review of its financials shows.
Sales for 2024/25 were up 1% to $989 million, but operating expenses grew 3.9% to $541.6 million.
As for its individual businesses, its Rip Curl surf lifestyle brand made $30.6 million in underlying earnings before interest, tax, depreciation and amorisation (EBIDTA), down 27% from last year, while its Kathmandu outdoor store chain posted a $1.3 million EBITDA loss after a $16 million profit in 2023/24.
Oboz Footwear, its Montana-based line of hiking boots, recorded a $3.3 million EBITDA loss, from a $300,000 loss the year before.
KMD said that in a challenging trading environment, net working capital efficiency – managing its cashflows, essentially – was a key focus for the group.
As of July 31, KMD had $157.7 million in net working capital, down $40.6 from a year ago.
It had a net debt position of $52.8 million, with funding headroom of around $235 million.
In a promising sign, KMD’s August sales were up 10.5% above last year, with Kathmandu’s same store sales up 22% year-on-year.
In early trading, KMD’s ASX-listed shares were up 2.4% to 21.5 cents – still leaving them down 44.9% for the year.
