The KMD Brands Ltd (ASX: KMD) share price is on the slide on Wednesday.
In morning trade, the ASX All Ordinaries retailer's shares are down over 1% after the release of its FY 2023 results.
KMD share price falls on FY 2023 results
- Sales up 12.6% to NZ$1,103 million
- Gross profit up 13% to NZ$651.9 million
- EBITDA up 15.1% to NZ$200.1 million
- Net profit after tax (NPAT) up 8.6% to NZ$36.6 million
- Final dividend of 3 NZ cents per share
What happened in FY 2023?
For the 12 months ended 30 June, the ASX All Ordinaries share reported a 12.6% increase in sales to a record of NZ$1,103 million. This was the first time the company has achieved sales above NZ$1 billion.
This was driven by an 8.3% increase in Rip Curl sales to NZ$581.5 million, a 10.6% lift in Kathmandu sales to NZ$422.2 million, and a 61.8% jump in Oboz sales to NZ$99.3 million. Management advised that this reflects the first full year of uninterrupted trade post-pandemic and strong sales growth from all brands in the first three quarters.
And while Rip Curl posted a decline in earnings for the year, this was offset by exceptionally strong profit growth from the Kathmandu and Oboz brands.
A final dividend of 3 NZ cents per share was declared, bringing its FY 2023 dividends to 6 NZ cents per share.
Management commentary
KMD's Group CEO and managing director, Michael Daly, was pleased with the results. Particularly given the tough consumer environment and the Kathmandu brand facing its warmest winter on record. He said:
KMD Brands has achieved record sales of over $1.1 billion dollars in our first year of uninterrupted trade post-pandemic, a significant milestone for the Group. Strong sales growth was delivered across all key geographies, with Rip Curl and Oboz achieving record sales. Kathmandu sales grew strongly over the first three quarters of the year. The fourth quarter for Kathmandu was more challenging with increased cost-of-living pressures softening consumer sentiment, and the warmest winter on record in Australia, which cycled the best-ever winter trade season last year.
Outlook
Potentially dragging on the ASX All Ordinaries share today has been its outlook commentary. Management revealed that sales for August were down 6.4% on last year's levels.
The trend in Kathmandu sales continued from the fourth quarter of FY 2023 into August but was consistent with pre-pandemic sales levels at this time of year. Rip Curl and Oboz have seen good momentum in direct-to-consumer sales.
Daly commented:
The long-term fundamentals of our diversified group of outdoor brands remain intact. Despite the challenging consumer sentiment, we expect tailwinds with the continued return to travel, positive impact from the launch of innovative products and the outdoor lifestyle trend post-pandemic.
We are extremely motivated by the opportunities that lie ahead for our strong and innovative team. In a relatively short time, we've evolved from a single brand ANZ retailer to a global house of brands, diversified by channels, products, and geographies. We've achieved a number of significant milestones in FY23, in our first year of uninterrupted trade postpandemic.
