Kathmandu appears to have bucked a retail downturn, which saw The Warehouse report a 2.7% decline in sales during the holiday period and prompted a forecast $6 million decline in after tax profit.
However, Kathmandu shares spiked more than 11% on the positive news to trade around $2.
Nationally, electronic transaction company Paymark reported a 6.7% national decline in transactions, from 1.85 million to 1.72 million, while values were down 2.8% from $101.8 million to $98.9 million for the period.
Otago's volume of transactions for Boxing Day 2010 was down 3.2% while overall volume for the day was relatively static at about $5.5 million, or down 0.4%.
For the six-month period of trading to the end of this month, Kathmandu chief executive Peter Halkett expected company performance to be "significantly ahead" of the same trading period a year ago.
Unaudited Kathmandu group sales across New Zealand and Australia would be in the range of $124 million to $126 million, up between 16.3% and 18.2%, while earnings before interest and tax were expected to fall within a range of $18.5 million to $19.5 million, up 20% to 26% on the previous period.
"We've been pleased with our trading performance throughout the Christmas period ...
However, our overall profit result for the full year will remain dependent on second-half-year trading, when historically approximately 60% of Kathmandu's full-year's sales are made," Mr Halkett said in a statement yesterday.
Craigs Investment Partners broker Peter McIntyre said the positive Kathmandu update, compared to downturns elsewhere in the retail sector, reflected the "continued patch-iness" in the overall sector.
Forsyth Barr broker Peter Young said the update reflected a "very positive trading" and a "solid performance" in the same-store sales increases.
"This is against a backdrop of a fairly soft Christmas for many retailers in both New Zealand and Australia," Mr Young said.
He cautioned that Kathmandu's second half is more important, with its two major sales periods of winter and Easter falling in it, so the full-year result will be highly dependent on the second half.
"Nevertheless, momentum is clearly very positive ... and we expect market forecasts to be upgraded," he said.
Mr McIntyre said the biggest surprise was in the increases in gross margin and same-store sales.
The latter rose between about 8.9% and 10.3%, but Mr McIntyre also noted the cautionary statement that the majority of income was expected during the forthcoming second-half trading.
Mr Halkett credited strong sales performance during December, and for the month to date in January, in both Australia and New Zealand, combined with improved gross margins as being the primary reasons for the year-on-year increases.
Kathmandu's half-year result is scheduled for release on March 17.
