Kathmandu owner KMD Brands and Baby Bunting still feeling sting of consumer pullback
The latest financial reports from two listed retailers on Tuesday show the pullback in consumer spending is far from over as soaring living costs crunch households.
Infant retailer Baby Bunting revealed an 83 per cent slump in net profit to $1.7 million in the year to the end of June, while sales fell 5 per cent to $498.4m.
Investors seemed unfazed by the results, instead focusing on Baby Bunting’s positive outlook for the current year to send shares up 8.9 per cent to $1.66 on Tuesday.
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Baby Bunting chief executive Mark Teperson, who joined the retailer last October, said it was pleasing to see the implementation of the strategic growth initiatives announced in June starting to deliver positive momentum.
Of note, he said, was the improvement in comparable store sales in May to June, which are now down just 0.7 per cent.
Mr Teperson, who joined the retailer last October, said its key priorities for the rest of the financial year included the redesign of store formats and the phased roll-out of new stores and refurbishments.
Fellow listed retailer KMD Brands the same day said sales for its surfwear mainstay Ripcurl and outdoor clothing label Kathmandu have shown improvements in the third and fourth quarters.
In a trading update, KMD revealed Rip Curl sales were down 7.3 per cent for the full-year, compared with the first-half’s 9.2 per cent slupm.
Sales for Kathmandu improved to be just down 14.5 per cent in the full-year, from a 21.5 per cent per cent decline earlier in the financial year.
It said Oboz reported a 20 per cent fall in sales for the first half but improved to be just down 7/9 per cent in the fourth quarter.
KMD confirmed underlying earnings before interest, tax, depreciation and amortisation are expected to be in the range of $NZ49m ($44.6m) to $NZ51m for the 2024 financial year.
Rip Curl direct-to-consumer sales were 2.8 per cent below last year’s record sales result, outperforming the wholesale channel.
KMD shares were up 6.8 per cent to 47¢.
