Kathmandu profit warning follows poor sales
Shares plunge on the bad news.
Listed retailer Kathmandu has issued a profit warning blaming weak consumer spending for the lowered forecast.
Christmas trading has been softer than expected meaning earnings for first half of FY12 are now seen lower than the $23.2m EBITDA achieved for the same period last year.
At last month’s AGM, Kathmandu said for the 15 weeks to 13 November sales had increased by 16.0% on pcp (17.6% at constant exchange rates).
However, the company said today that same store sales over the past five weeks have been less than last year.
“In this period trading has been stronger in New Zealand than Australia and gross margins have been maintained at approximately the same levels as last year. As there are six more weeks of trading before the end of the first half FY12, it is too early to provide more specific detailed guidance on either total sales or profitability for the full period,” the company said in a statement.
Kathmandu’s CEO Peter Halkett says the retail environment has become increasingly difficult in both Australia and New Zealand.
“Our trading performance throughout the Christmas period to date has been below expectations, which is a reflection of weaker consumer spending but our overall profit result for the full year remains primarily dependent on second half year trading which last year contributed almost 70% of our total year profit.”
“As Kathmandu continues to roll out more stores, the weighting of our earnings towards second half trading is expected to increase due to two of our three major sale events occurring in the second half”.
Mr Halkett stated that “a number of actions have been initiated to recover the sales shortfall over the Christmas period and, subject to second half trading, full year profit growth remains achievable.”
Kathmandu’s full result for the half year will be released on Wednesday 21 March 2012. The company's shares [NZX:KMD] last traded at $1.65 each, down 55c or 25% from the $2.20.
NBR staff
Thu, 22 Dec 2011
Thu, 22 Dec 2011
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Kathmandu profit warning follows poor sales
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