Finance Finance News Kathmandu profit down

Kathmandu profit down

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Kathmandu is the latest retailer to suffer significant sale declines due to the warmer start to winter.

The outdoor apparel and equipment retailer says its sales through June have been below expectations in both Australia and New Zealand.

As a result, the company now estimates earnings before interest and tax (EBIT) for the 11 months to the end of June to be between 10 and 15 per cent below its fiscal 2013 year.

Kathmandu chief executive Peter Halkett says the downturn in sales had been particularly felt in the past fortnight, during the start of the company’s winter sale promotion.

“In this period, across all the major metropolitan cities in both countries with the exception of Perth, we have been selling in a period of warmer, drier and generally sunnier weather than last year,” he said.

He said if the normal winter pattern did not return by July than the company anticipated earnings for its 2014 fiscal year to be between 10 and 15 per cent down on the previous fiscal year’s EBIT of $63.4 million.

There is still a chance of improvement in the remaining five weeks of Kathmandu’s financial year but, Mr Halkett said, forecasts of a mild and drier winter across Australasia reduced hopes of a trading recovery in its core winter stock, including jackets, thermals and fleeces.

Kathmandu’s full year result for 2014 will be released to the market on September 22, and an update on the estimate will be provided in early August.