Leading outdoors retailer Kathmandu has signalled more tough trading conditions ahead, despite a 16% rise in sales to $56 million for the first 15 weeks of the present financial year.
At its annual shareholders meeting yesterday, chief executive Peter Halkett said that despite the difficult retail trading conditions, Kathmandu's sales performance in the first 15 weeks of the financial year was in line with expectations.
"Sales momentum has been steady and we have maintained gross margins. It must be noted, however, first half-year profit is highly dependent on the Christmas and January trading period," he said in a statement.
However, he said on the outlook, the new normal for the market was its volatility and unpredictability, with more competition both regionally and globally for the "attractive" active-outdoor market.
"We're unlikely to see improvement in retail conditions in the short term.
"Operating costs, such as rent and payroll, are outpacing retail sales growth," Mr Halkett said.
Shares in Kathmandu were unchanged at $2.57 yesterday.
Forsyth Barr broker Peter Young said it was unlikely to see any significant change to retail conditions in the short term, with probably more negative risk than positives ahead.
Last financial year, Kathmandu saw sales rise 24.5% to $301.6 million, earnings before interest and tax were up 32% at $64 million and after tax-profit rose 55% to $39.1 million.
Mr Halkett confirmed that Kathmandu is still aiming to open 15 new stores during full year 2012, with two new Australian stores scheduled to open early next year and "a number of other sites" being under negotiation.
It has 111 stores at present; with 66 in Australia, 39 in New Zealand and six in the United Kingdom. Since August, Kathmandu has opened new stores in Coastlands, Wellington, The Palms in Christchurch, and relocated its Melbourne store.
Mr Halkett said that, before Christmas, Kathmandu would open a store in Warrnambool in Victoria, and relocate stores in Sydney and Willis St in Wellington, while the relocated Newmarket store in Auckland was expected to open in February.
Mr Halkett said it was difficult to provide specific financial guidance, but the company was continuing to plan for growth and was otherwise "positive" about the full-year 2012 outlook.
