The parent company of Kathmandu and Rip Curl has posted a shock $NZ93.6 million ($A105 million) statutory loss – its worst in at least a decade.
KMD Brands said when excluding a $45.5 million non-cash writedown of its Oboz footwear business and other items, it still lost $NZ28.3 million on an underlying basis for the year to July 31.
KMD said it was once again not paying shareholders a dividend, as it hasn’t since 2023, and was taking steps to carefully manage capital.
KMD announced earlier this month it was closing 21 stores, mostly outside Australia, out of its global portfolio of 328 company-owned Kathmandu and Rip Curl shops.
The Christchurch-headquartered, dual-listed company said on Wednesday it had also recently restructured its business in a move designed to save $NZ5 million a year.
The 2024/25 results are much worse than those of a year previous, when KMD Brands posted a statutory loss of $NZ48.3 million and an underlying loss of $NZ1.1 million.
Before that KMD Brands had been profitable since at least 2014/15, a review of its financials shows.
Sales for 2024/25 were up one per cent to $NZ989 million, but operating expenses grew 3.9 per cent to $NZ541.6 million.
As for its individual businesses, its Rip Curl surf lifestyle brand made $NZ30.6 million in underlying earnings before interest, tax, depreciation and amorisation (EBIDTA), down 27 per cent from last year, while its Kathmandu outdoor store chain posted a $NZ1.3 million EBITDA loss after a $16 million profit in 2023/24.
Rip Curl came under fire for using Western Australian professional longboarder and transgender woman Sasha Lowerson in a promotion for women’s surfing last year.
Lowerson’s appointment came after Rip Curl severed ties with pro-surfer and shark attack survivor Bethany Hamilton – one of the world’s most famous surfers – reportedly over her opposition to transgender people competing in women’s sport.
At the time Many Aussies vowed to boycott the brand over the move.
‘Rip Curl was always one of my favorite brands in this industry, bummer I’ll never spend another dime with em,’ posted another.
‘RIP for me rip curl!!! Not supporting anymore!’ added another.
One Aussie dad even burned his Rip Curl shorts: ‘Go woke, go broke – f*** you, Rip Curl,’ he said to the camera before throwing his boardshorts into a fire where they were engulfed in smoke and flames.
The parent company of Kathmandu and Rip Curl has posted a shock $NZ93.6 million ($A105 million) statutory loss – its worst in at least a decade.
Rip Curl came under fire last year after featuring a transgender boarder in a campaign to promote women’s surfing
Oboz Footwear, its Montana-based line of hiking boots, recorded a $NZ3.3 million EBITDA loss, from a $NZ300,000 loss the year before.
KMD said that in a challenging trading environment, net working capital efficiency – managing its cashflows, essentially – was a key focus for the group.
As of July 31, KMD had $NZ157.7 million in net working capital, down $NZ40.6 from a year ago.
It had a net debt position of $NZ52.8 million, with funding headroom of around $NZ235 million.
In a promising sign, KMD’s August sales were up 10.5 per cent above last year, with Kathmandu’s same store sales up 22 per cent year-on-year.
In early trading, KMD’s ASX-listed shares were up 2.4 per cent to 21.5 cents – still leaving them down 44.9 per cent for the year.
The news comes after plunging profits, store closures and a share-market bloodbath grip Myer.
The 124-year-old chain revealed on Tuesday that its operating profit had collapsed by almost a third in the 12 months to July 26, blaming sluggish consumer spending and tough economic conditions.
Profits for the Myer Group slumped by almost a third in the last financial year, citing tough economic conditions and declining consumer demand
Following a profit of $43.5million last year, Myer also recorded a $211.2million statutory loss
Investors dumped Myer stock after the results, sending shares down 15 per cent at the open of the day’s trade, and the freefall accelerated to a 29 per cent loss by midday, trading at just $0.46.
The retailer’s operating profit after tax fell to $36.8 million, down 30 per cent on the previous year, but its bottom line result was a $211.2 million statutory loss as it booked a writedown in the value of the five fashion brands it bought from Premier Investments: Just Jeans, Jay Jays, Jacqui E, Portmans and Dotti.
As a result the company declared no final dividend to shareholders.
Executive chairwoman Olivia Wirth tried to steady nerves, insisting 2024-25 was a ‘transition year’ as the group bedded down its new brands and slashed $30 million in costs.
‘Despite challenging macroeconomic conditions and tough retail markets in Australia and New Zealand, we achieved positive sales growth in our first period as a combined group,’ she said.
Despite company optimism that better times lay ahead, retail expert Dr Gary Mortimer warns the clock is ticking for Myer.
He said that sales for Myer’s newly acquired brands Just Jeans, Jay Jays, Jacqui E, Portmans and Dotti were either flat or declined during the second half of 2024-25.
‘It’s only year one of the acquisition, so it will be interesting to see how the next 12-24 months play out,’ Dr Mortimer told Daily Mail.
‘It’s been a challenging time for department stores, which have struggled in recent years.
Myer executive chairwoman Olivia Wirth (pictured with Premier Investments’ Solomon Lew) described 2024-25 as a transition year for the retail giant
‘It’s early days for Myer, so the next 12 months will be telling.’
Dr Mortimer warned that Myer’s fashion and homewares brands could continue to struggle due to continued inflation – particularly the burgeoning cost of housing – savaging consumer spending, pushing customers toward budget alternatives like Target and Kmart and online portals.
‘Discretionary spending is down because people are more focused on paying their rent or mortgages and getting food on the table,’ he said.
‘Brands such as Dotti are highly exposed to international fast fashion retail killers such as Shein and Temu.’
‘If they want people to spend in-store, it will require some cost-of-living relief.
‘Myer also needs a clearer value proposition on their breadth of apparel brands.’
It’s not all not doom and gloom with Myer Retail recording a 22.9 per cent jump in online sales in the financial year.
The retail giant also revealed that group sales for the first seven weeks of the 2025-26 year were 3.1 per cent up compared to the same period last year.
‘We are cautiously optimistic about the year ahead, with emerging pockets of improving consumer strength,’ Ms Wirth said.
‘We also expect to see a return on the enhancements and investments we have made to strengthen the group and offset ongoing cost of doing business headwinds.’
