Shares in outdoor retailer Kathmandu have tumbled down the mountain, dropping nearly 15 per cent in early trade after the company cut its guidance following poor Christmas and Boxing Day sales.
The camping and hiking supplier – listed in both Australia and New Zealand – said on Thursday same-store sales for the 22 weeks to December 30 were down 1.0 per cent on the prior year at constant exchange rates, with same-store sales down 0.2 per cent in Australia, and down 2.4 per cent in New Zealand.
Kathmandu had earlier told shareholders at its November annual general meeting that solid trading during the first 15 weeks of the fiscal year was expected to lift first-half profit strongly above last year, albeit highly dependent on a successful summer sale.
The company was trading 14.89 per cent lower at $2.23 on the ASX at 1245 AEDT, down 26.4 per cent from a near four-year high of $3.03 in October.
“Following strong same store sales growth in quarter one, we are disappointed in trading results in Australia and New Zealand over the Christmas and Boxing Day period,” chief executive officer Xavier Simonet said.
“Notwithstanding the adverse impact of the NZD/AUD exchange rate on reported profit, assuming current trends continue, total group profits are now expected to be 4 per cent to 8 per cent above 1H FY2018.”
Kathmandu’s share price drop capped a poor morning for ASX-listed retailers, with JB Hi-Fi down 3.7 per cent at $20.80, Harvey Norman down 1.58 per cent to $3.11, Premier Investments flat at $14.41, Super Retail Group down 4.54 per cent at $6.52, and Lovisa down 5.79 per cent at $5.86.
However, Wesfarmers was up 1.36 per cent to $31.98 and The Reject Shop rose 0.36 per cent to $2.75.
Partially offsetting Kathmandu’s lower-than-expected summer sales was a 60 basis point improvement in retail gross margins, to 64 per cent, while the recently-acquired Oboz shoe business continues to show strong growth.
Oboz sales for the first half of 2019 are expected to grow by 35 per cent to about $NZ27.5m, with a gross margin of 40 per cent.
Kathmandu’s shares jumped nearly 17 per cent in November after it reported a 7.1 per cent rise in Australian same store sales, and a 5.2 per cent rise in New Zealand.
Meanwhile, same-store sales in Kathmandu’s Australian stores rose 7.5 per cent in FY2018, comfortably offsetting a clearance-driven 2.4 per cent decline in New Zealand and lifting total sales 11.7 per cent to a record $NZ497.4 million.
Net profit for the 12 months to July 31 rose 32.8 per cent.
Kathmandu said it will release the full result for the half year on March 26.