Main street sports retailer Kathmandu has highlighted a modest start to its trading year, up 1% during the first 16 weeks, compared to a year ago.
However, foreign exchange impacts have prompted a downgrade by one brokerage while Australian competition concerns another broker.
In its full year to July result, Kathmandu recorded a 27% increase in after-tax profit, to $44.2 million on a 10.6% revenue gain, to $384 million.
In its annual shareholders presentation in Auckland this week, chief executive Peter Halkett did not give specific financial guidance, saying that subject to no further economic deterioration, the company expected ''another strong performance'' during the year, following a two-year investment programme.
Forsyth Barr broker Suzanne Kinnaird said while group sales were up 1%, at $70.9 million, for the first 16 weeks, currency exchange impacts had masked stronger sales growth.
Exchange had a negative $5.3 million impact during the period.
Mrs Kinnaird said Kathmandu was being downgraded, from hold to reduce, as it appeared expensive, relative to its Australian peer companies and the target price revised up from $3.25 to $3.50.
Following the market update yesterday, Kathmandu shares were down slightly at $3.70.
Craigs Investment Partners broker Peter McIntyre said while Kathmandu had a strong balance sheet, from recent new stores and growth, investors were questioning whether this could be maintained in Australia, reflected in a share decline from $3.93 three weeks ago to about $3.70 yesterday.
Craigs was maintaining a $3.35 price target and hold recommendation.
