Adventure gear chain Kathmandu reports weak Christmas and New Year’s sales as experts say it’s only going to get worse for retail in 2019
- Kathmandu admitted weaker than-expected sales on Christmas and Boxing Day
- Adventure apparel chain enjoyed 7.1 per cent sales growth under November 11
- Comparable sales ended 0.2 less despite the strong start in the retail quarter
- Kathmandu then dipped 10.7 per cent on the ASX in the first 30 minutes of trade
Kathmandu has reported weaker than-expected Christmas and Boxing Day trading, making a disappointing start to the new year.
The adventure apparel chain’s chief executive Xavier Simonet said on Thursday disappointing holidays sales clouded an otherwise prosperous year.
‘Following strong same store sales growth in Q1 (the first quarter). We are disappointed in trading results in Australia and New Zealand over the Christmas and Boxing Day period,’ he said.
Kathmandu enjoyed sales growth of 7.1 from the end of July up until November 11 last year, when sales suddenly dipped.
Kathmandu chief executive Xavier Simonet (pictured) said on Thursday disappointing holidays sales clouded an otherwise prosperous year
Despite the strong start, the comparable sales for the period ended 0.2 per cent lower.
Kathmandu dipped 10.7 per cent on the ASX in the first 30 minutes of trade.
Prices fell from $2.62 to $2.34 – a sharp decline compared to trading in July that was set at $3.03.
Despite the disappointing start to the new year, Jirsch Sutherland partner Andrew Spring told Daily Mail Australia Kathmandu had given ‘positive insights’ for investors.
‘Certainly, any decline in sales is not what a business budgets to achieve, but the balancing comments around improved gross and net margin provide positive insights into the Kathmandu strategy for investors.’
On that note, retail expert Brian Walker said Kathmandu had enjoyed a four per cent margin growth.
‘The margin report went from 60 to 64 per cent. That’s a significant step up for a business that’s heavily involved in high-low pricing.
‘For them to get a higher margin was a good sign.’
As to what Kathmandu’s sale’s forecast looked like, that was still to be determined.
Despite the disappointing start to the new year, Jirsch Sutherland partner Andrew Spring told Daily Mail Australia Kathmandu (pictured) had given ‘positive insights’ for investors
Mr Walker said there was also the expectation that Christmas sales in general would be ‘marginally up from last year.’
Though hospitality and catering would be the main driver and other sectors like apparel would come out flatter.
‘Overall, we think we had a reasonably good Christmas,’ Mr Walker said.
With the holiday season pretty much over, Mr Walker said he expected the new year to be similar to 2018, with an omni-channel focus between online and brick and mortar shopping.
‘More businesses that don’t have a defined point of difference or unique product will be under pressure.
‘There will be a growth of mobile commerce and the use of smartphones to drive e-commerce and physical sales.’
Jirsch Sutherland’s Mr Spring added, ‘Finding the right mix of physical versus digital presence for a brand/product will continue to be a challenge for retailers in 2019.’