KMD Brands, formerly Kathmandu Holdings Limited, reported sales dipped 0.8 percent in the six months ended January 31. The second quarter showed a positive rebound following Q1 COVID lockdown impacts on Kathmandu and Rip Curl in Australasia. Oboz’s sales were impacted by the COVID closure of Vietnam factories.

KMD Brands noted that the factories have now reopened.

Sales in the half reached NZD$407.3 million against NZD$410.7 million a year ago.

By brand, Rip Curl sales reached NZD$257.8 million, up 2.7 percent. Kathmandu’s sales were NZD$128.3 million, down 0.8 percent. Oboz’s sales totaled NZD$21.2 million, down 30.2 percent.

Gross margin of 57.7 percent was down from 59.0 percent a year ago, due to elevated international freight costs, and an increased clearance mix for the Kathmandu brand.

Underlying EBITDA of NZD$10.2 million was down 78.8 percent from NZD$48.2 million a year ago, excluding the impact of IFRS 16. The statutory NPAT (net profit after tax) was a loss of NZD$5.5 million, representing a decline of 124.7 percent.

Group CEO and Managing Director Michael Daly said: “We continued to deliver on our strategic objectives, positioning KMD Brands for growth as travel rebounds globally and COVID-related impacts on supply abate. We maintained a strong focus on building our global brands, sponsoring the first World Surf League finals with the men’s event won by a Rip Curl surfer. We opened twelve new owned/licensed retail stores globally, and online sales increased to 17.4 percent of direct-to-consumer sales, rewarding initiatives to elevate digital capabilities. Substantial progress was also achieved on our ESG strategy.

“Rip Curl delivered sales growth of 2.7 percent over the half, with strong sales growth in online and wholesale channels, underpinned by strong performance in Europe and Hawaii in particular, while North America was impacted by short-term wetsuit shortages and port congestion. Rip Curl returned to same-store sales growth in Q2, as lockdown restrictions lifted and the business rebounded.

“The Kathmandu Australasian store network was more impacted by COVID closures in Q1 than the Rip Curl global store network, before recovering strongly in Q2. While Kathmandu continued to feel the impacts of COVID-related travel restrictions, we were pleased to see a 46.4 percent increase in online sales, and the business is well-positioned to grow internationally, with the Europe Fall.Winter 2022 selling complete, and forward orders in line with expectations.”

KMD Brands Limited operates 266 stores under the Kathmandu banner in Australia and New Zealand. It acquired Oboz in 2018 and Rip Curl in 2019.