The company, which saw off a hostile takeover from Briscoe Holdings, reported earnings before interest and tax of $15.1million in the six months ended January, well up from the $600,000 it reported in the previous corresponding period.
The gross profit was up nearly 16% to $123.1million and the gross margin was nearly 63%, up 3.6%.
The profit after tax was $9.4million compared with a loss of $1.8million in the pcp and a Forsyth Barr forecast of $8.9million.
The interim dividend was unchanged at 3c per share. Revenue was up more than 9% to $196million.
Forsyth Barr broker Peter Young said both of Kathmandu's core markets of New Zealand and Australia delivered improved margin and sales results.
‘‘This reflects a combination of internal strategic changes and a positive macro backdrop. The divisional mix was different to our expectations, with New Zealand outperforming but the lift in Australian earnings lower than we expected.''
The company reported a material reduction in net debt levels, underpinned by a lift in operating cash flow largely as a result of the earnings improvement, he said.
Kathmandu provided full-year forecasts in its target company statement in response to Briscoe's unsuccessful takeover offer. The company remained committed to a full-year profit of $30.2million.
‘‘We see scope for the company to exceed this. However, we caution Kathmandu faces a headwind from favourable hedging rolling off and is cycling a stronger, more typical, product mix and favourable negotiations with suppliers. Nonetheless, it is a step change for the business.''
New chief executive Xavier Simonet had been a key catalyst for the changes, Mr Young said.
Forsyth Barr had an outperform rating on Kathmandu.
In a statement to the Stock Exchange, Mr Simonet said while it was good to be on track with the plan for the first half, as in every year, the full year result was highly dependent on the sales and margin achieve in its Easter and winter campaigns.
Kathmandu had just started its Easter sale, so it was too early to provide an update on the promotion.
The company remained committed to offering great value, innovative, distinctive and quality products and providing a seamless in-store or online shopping experience, he said.
‘‘I am excited about the opportunities for Kathmandu to further expand into international markets and our profitable Australasian business is providing the foundation for this.''
Sustained growth required continued cost efficiencies and leveraging existing investments, which would remain a strong focus for management this year and beyond, Mr Simonet said.
At a glance
Australia: First-half operating profit of $7.8million underpinned by same-store sales growth of 4.3% and gross margin expansion of 3.2%.
New Zealand: Operating profit of $15.8million, up 80% on the previous year, driven by 3.1% same-stores sales growth and a stellar lift in gross margins of 4.2%.
