Kathmandu's chief executive Xavier Simonet said the company's Christmas and January trading performance period was in line with management expectations.
"Top line sales growth was in line with expectations but crucially it was profitable growth achieved through an improved gross margin outcome and realising planned cost efficiencies,'' he said in a market update yesterday.
He expected first-half sales would rise 9.1%, from $179.4million a year ago to $195.7million.
Lacklustre sales and last year's mild winter left Kathmandu with high stock inventories, which meant profit margins were pared back to clear the stock.
Mr Simonet gave guidance yesterday after-tax profit for the first-half trading would lift from the $1.8million loss a year ago to between $8.5million and $9.5million, and the company was "on track'' to deliver a full-year profit of $30.2million; almost 50% up on the previous year.
Kathmandu's past two full-year profits had declined from $44.2million to $20.4million.
Since May 2014's high of $4 a share, the share price for the past year been well under $1.75.
Yesterday, it was up almost 8% to $1.64, following the announcement.
Craigs Investment Partners broker Peter McIntyre said Kathmandu was "showing signs of normalisation'' following its "horrific result'' in 2015, from the compounding weather and stock issues.
Mr Simonet's reiteration in expecting a full-year after-tax profit of $30.2million was evidence consumers were back out spending, Mr McIntyre said.
A year ago, in reaction to Kathmandu's then shock profit warning, more than $100million was wiped from its market capitalisation, with its share price halved from a year earlier.
It had warned its previous half-year $11million profit could plunge to a loss of up to $2million.
By mid-September last year, Briscoe Group's hostile 100% takeover bid for $362million for Kathmandu had fallen flat, largely on shareholder disinterest in the implied $1.80 per share, which carried only a 20c cash component.
Briscoes only gained a less-than-25% stake, having started the play in July with an almost 20% stake, chasing the 80.1% it did not already own.
Mr Simonet cautioned the full-year profit result remained dependent on successful second-half trading, when about 55% of sales were made and between about 65% and 70% of earnings.
● Kathmandu's half-year result will be released on March 22.
