KMD Brands Limited (Group), parent of the Rip Curl, Kathmandu, and Oboz brands, on Monday, February 2, reported an update on its business performance for the first five months (YTD) of fiscal 2026.

The Group said that sales trends continued to be positive in the YTD period, growing 7.9 percent year-over-year, and remained consistent with the first-quarter trading update provided at its Annual Meeting on November 19, 2025.

The total sales result was said to be driven by growth in the direct-to-consumer (DTC) channel, especially for Kathmandu over the Black Friday and Christmas holiday trading periods.

Total sales YTD benefited approximately +2 percent from year-on-year changes in exchange rates used to convert Rip Curl Australian dollars (A$) and Oboz U.S. dollars ($) into the Group NZ reporting currency. KMD Brands Limited reports in New Zealand dollar (NZ$) currency,

 Sales Trend Summary

Five-Month Fiscal 2026 Year-to-Date Same-Store Sales

  • Rip Curl +1.7 percent year-over-year (y/y), with strong same-store sales results for North America.
  • Kathmandu +12.7 percent y/y, continuing sales momentum in both Australia and New Zealand.

Group wholesale sales for the YTD period were up 9.4 percent year-over-year (y/y). Forward wholesale order books reportedly “remain stable” and are slightly above last year. In-season buying from key accounts has also been positive.

Group gross margin YTD is 56.7 percent of net sales, approximately 100 basis points lower y/y due to “the elevated level of promotional activity in the marketplace and continued focus by all brands to optimize mix and sell through aged inventory.” Five-month YTD gross margin is above H2 2025 gross margin.

The Group expects first half (H1 2026) underlying EBITDA to be in the range of NZ$8 million to A$11 million, compared to A$3.9 million H1 2025.

As part of a longer-term refinancing plan, the Group said it has extended the term of its existing debt facility to April 2027 and has adjusted the fixed cover charge ratio for the July 2026 and January 2027 measurement periods, with no restrictions in place. The Group has also reduced its total syndicated bank facilities to approximately NZ$283 million. The Group expects to comply with all amended covenants at the January 2026 measurement point and is in discussions with lenders on the refinancing of its long-term debt facilities.

The Group expects net debt at January 31, 2026, to be in the range of $85 million to $90 million, compared to NZ$76.2 million in H1 2025, said to be impacted by the weakening of the NZ dollar year-on-year.

“We are pleased with the Group’s early progress in the execution of its Next Level transformation strategy, in particular trading over the critical Black Friday and Christmas periods,” commented Brent Scrimshaw, group CEO and managing director, KMD Brands Ltd. “Whilst we are still at the early stages of our transformation, we are encouraged by the improved performance of Kathmandu, with an adjusted flow of fresh innovation planned in the second half which we believe will strengthen our ability to expand gross margin over time. We continue to focus on optimizing the balance between sales and gross margin while actively managing our inventory investment.”

Image courtesy Rip Curl/KMD Brands Limited