EXEC: Rip Curl and Oboz See Trailing 4-Month Sales Down Despite Solid Black Friday

With the Black Friday retail trading period completed, KMD Brands Limited, the parent company of the Rip Curl, Oboz and Kathmandu brands, provided a trading update for the first four months of the 2024 financial year ended November 30.

Group sales were reportedly down 12.5 percent year-over-year (YoY) for the four-month fiscal year-to-date (YTD) period, reflecting “ongoing weakness in consumer sentiment.”

Consistent with sales trends in the fourth quarter of FY23, Kathmandu has continued to experience weakness in rainwear and insulation categories in Australia. Kathmandu’s total YTD sales are down 21.6 percent, cycling 71.7 percent growth in the corresponding period last year.

Following record sales years in FY23, Rip Curl and Oboz have reportedly continued to deliver good results in direct-to-consumer sales. However, YTD total sales are down 5.7 percent for Rip Curl and down 18.2 percent for Oboz as wholesale sales for both brands have declined, with retailers reducing inventory holdings in the short term.

Group gross margin has reportedly improved, with operating costs said to be well controlled and actively managed.

Group underlying EBITDA for the YTD period is approximately $16 million below last year, with Christmas and January retail trading periods to come.

Group working capital has decreased 10.2 percent year-over-year.

“Black Friday promotions for Rip Curl and Oboz delivered strong sales as these brands continued to deliver good results in direct-to-consumer channels while navigating short-term weakness in wholesale channels as retailers reduce inventory in uncertain trading conditions,” said Group CEO and Managing Director Michael Daly. “Improvement in Kathmandu’s sales performance remains our priority.”

Daly said they remain focused on optimizing gross margin, controlling operating costs, and reducing working capital for all of our brands.

“We continue to make progress towards our working capital target of 18 percent of sales for the full year, which is expected to drive strong cash flow generation in the second half year,” he concluded in the interim release.