Australia, insurance, car, home, live, holidays

The company said consumer sentiment weakened in the fourth quarter of the year.

For Kathmandu – known for its puffer jackets and hiking and camping gear – sales for the year rose 7 per cent in Australia and 13.1 per cent in New Zealand. Overall,the brand’s sales were up 10.6 per cent to $422.2 million and underlying earnings were up 44 per cent to $52.5 million.

Despite the strong result,the company revealed that conditions had weakened in the last three months of the year,with Australia’s winter being warmer than expected and consumers pulling back on discretionary spending.

KMD Brands chief executive Michael Daly said while it was impossible to work out what percentage of the slowdown was due to the warmer climate,there was no doubt that consumers were under pressure.

“Softer consumer sentiment is clearly something we are facing in all markets across all brands at the moment ... it’s an uncertain economic future that we face,and we as operators of the company have to be cautious,” he said.

Investors appeared concerned about the outlook,with the stock opening 2 per cent weaker and declining by 6.5 per cent to 72 cents just before 3pm.

There is still plenty to be optimistic about,Daly said,noting that the business was still experiencing strong demand for Rip Curl products in airports and beach locations across the world,while higher-income luxury travellers continue to spend on getaways.

Rip Curl reported an 8.3 per cent jump in sales for the year to $NZ 571.5 million.

But KMD Brands told analysts on a call on Wednesday morning that wholesale buyers globally had become more cautious and were not willing to take on too much stock over fears that shopper demand could deteriorate in the coming months.

The company is not taking any big risks with its push to grow Kathmandu sales across the world. The business achieved sales of $2.6 million from Europe and Canada in 2023 but is only just testing the waters on its goal to get to $NZ100 million in annual sales from global markets.

Daly said the company would be taking its time on a hard launch for Kathmandu overseas,given the brand has only recently appointed a new chief executive,former Crocs executive Megan Welch.

“It’s very much a case that we are only in a test and learn phase,” Daly said of the group’s international strategy for Kathmandu.

Commonwealth Bank household spending data released last week suggests that while online travel and accommodation bookings are solid and have helped drive recreation spending up by 8.4 per cent in the 12 months to August,consumers have continued to pull back on everyday household expenses,spending less in men’s and women’s fashion and home goods stores. Household goods spending is down by 3.6 per cent for the year.

Investors will see a dividend of NZ3¢ per share,unfranked,bringing the total payout to NZ6¢ for the year.

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