Briscoes is scheduled to report on September 19, followed by Kathmandu on the 21st.
Lifestyle and sporting goods retailer Kathmandu has provided full-year 2017 financial guidance ahead of Forsyth Barr broker Suzanne Kinnaird’s expectations, while Briscoes second-quarter sales growth and guidance was below expectations.
Mrs Kinnaird also raised the prospect of Briscoes taking another takeover tilt at Kathmandu, following its failed attempt in July 2015, given Briscoes had maintained its 19.9% Kathmandu stake.
"There is potential there for Briscoes to make a new offer," she said.
"Underpinning the higher-than-anticipated profit growth guidance was a fourth successive improvement in quarter on quarter same-store sales growth," she said.
This follows material strategic changes, the success of new product lines and improved engagement with its Summit Club members, she said.
Kathmandu’s recent guidance for after-tax profit rose from $37.4million to $38million, which was up between 11.6% to 13.4% on the previous year’s profit.
She had revised Kathmandu’s outlook, with estimated full-year after-tax profit up 4%, its target price rose from $2.40 to $2.50 and it retained an ‘‘outperform’’ stock rating.
"Key strengths" for Kathmandu included its strong brand, market leading position in Australasia, loyalty database and vertically integrated business model, she said.
"Kathmandu delivered a material lift in profit last year, off a weak base, following a suite of strategic changes implemented by new management," Mrs Kinnaird said.
Unseasonal weather had plagued Kathmandu sales for almost two years previously, leaving it with more inventory than it needed and, subsequently, squeezed margins as it discounted stock.
"[However] the low-hanging fruit has been picked and now the focus is on better asset utilisation, modest store rollout and the online channel," Mrs Kinnaird said.
Briscoes had reported ‘‘modest’’ second-quarter sales growth and guidance, below expectations and recent run rates,she said.
"Homeware saw a slowdown in momentum, with a later winter inhibiting Briscoes’ ability to fully capitalise on early season sales," she said.
She noted its Rebel Sport was the second half "standout", benefiting from the Lions tour, although not as much as was anticipated.
"Briscoes is a strong operator and has been enjoying a favourable macro backdrop," she said.
However, there was a risk that could slow in the future, she said.
Mrs Kinnaird had subsequently downgraded Briscoes’ estimated full-year after-tax profit by 1%, to $61.7million and revised its target price down from $4.20 to $4.10, maintaining a "neutral" rating on the stock.
She said while an extended summer had detracted from Briscoes being able to take advantage from key, early winter, promotional campaigns, it had indicated its stock inventory levels were "in good shape", heading into second-half trading.
