Outdoor Apparel Business Kathmandu Expects Profit To Soared 7 To Gross Profit Margin Over 60%.

Despite the adverse effects of warm winter, New Zealand outdoor Clothes & Accessories Retailer Kathmandu (ASX:KMD) has strong earnings growth. The company issued a profit forecast in June 30th, saying profit in the 2015-16 fiscal year is expected to rise by 71.5%.

The net profit is expected to be 32 million NZD (30 million 500 thousand Australian dollars) -3500 NZ. Previously, the company expected net profit of 30 million 200 thousand NZD, and the market consensus is expected to be 29 million 300 thousand NZD.

Profitability index is increasing rapidly

ACB News reported that the new profit forecast increased by 57%-71.5% compared with the net profit of 20 million 400 thousand NZD in fiscal year 2015, and the company's share price was boosted by the good news, which rose 18% on the day and closed at 1.48 Australian dollars / share. In July 1st, it gained 4.096% further, and closed at 1.525 Australian dollars / share.

According to Kathmandu, pre tax profit (EBIT) is expected to rise to 60%, which is expected to be between 49 million NZD -5300 NZD, exceeding the previous market consensus of 46 million 600 thousand NZD, and 2015 annual pre tax profit of 33 million 200 thousand NZD.

In the 2016 fiscal year ended January 31, 2016, the Kathmandu company reported that in the first half of fiscal year 2016, the company realized revenue of 196 million NZD, an increase of 9.3% compared with the same period last year, and the gross profit margin increased from 15.8% to 123 million NZD. EBIT increased from 600 thousand to NZ, with a net profit of 9 million 400 thousand NZ, compared with a loss of 1 million 800 thousand Nb in the same period last year.

The gross profit margin of the company increased from 59.3% in fiscal year 2015 to 62.8%. The company also actively launched online sales business, electricity sales in various countries grew by 23%, accounting for 6.6% of total sales.

　　 Kathmandu The company's annual performance also depends on its sales performance in July (the last month of fiscal year 2016). In early August, Kathmandu will issue further performance forecasts, and its annual performance is expected to be announced in September 21st.

In 1987, Kathmandu opened its first store in Melbourne. As of the end of January 2016, the company opened 163 stores. The company opened 4 new stores in the first half of fiscal year 2016, one in New Zealand and 3 in Australia. In 2003-04, Kathmandu opened its first store in the UK and landed on the Australian Stock Exchange and the New Zealand stock exchange in 2009, ranking the ASX300 index and the NZX50 index.

In the past few years, the growth rate of 300005.SZ, a Chinese A share listed company in the same industry, has slowed down, and now there are 1700 stores. Outdoor products The gross profit margin of the plate is 47.83%. In 2015, its operating income was 3 billion 808 million yuan, an increase of nearly 121.99% over the same period last year, and net profit of 263 million yuan, representing a decrease of 10.50% over the same period last year.

Reversing efforts to achieve results

It is worth noting that Kathmandu's new profit forecast did not exceed the 2014 high point, when the company's EBIT reached 64 million 300 thousand Australian dollars.

In fiscal year 2015, Kathmandu took the initiative to clean up a large number of winter inventories, resulting in the company's basic earnings cut compared to the same period last year. New Zealand retailer Briscoe group took the opportunity to launch a tender offer of 324 million Australian dollars, but it was eventually rejected by Kathmandu shareholders. As of September 2015, the Briscoe group's shareholding was still 19.9%.

After early matting, in the 2016 fiscal year, Kathmandu company's sales and gross profit margin increased sharply, the discount rate was reduced, the marketing expenses were reduced, the headquarters layoffs reduced manpower costs, and the final performance exceeded expectations.

Kathmandu chief executive Xavier Simonet (Xavier Simonet) said that the winter came late this year. But because of the novelty of the sales promotion activities and the efficient management, the gross profit margin was better than expected. Combined with cost control, the final 2016 fiscal year performance has been greatly improved.

Kathmandu sales growth slowed down due to unfavorable factors of warm winter weather in Australia and New Zealand this year. In the 47 weeks ended June 26th, the same store sales increased by 2.6% at constant exchange rates. In the first half of fiscal year, the same store sales increased by 3.8%. However, Kathmandu said it has cut gross margins by cutting the discount rate, and expects gross margins to be 61% to 63% in the current fiscal year.