Kathmandu shares jump to 5-week high on upbeat outlook
Kathmandu shares jump to 5-week high on upbeat outlook for strong performance in full year
By Tina Morrison
May 7 (BusinessDesk) – Shares in Kathmandu Holdings jumped to a five-week high, making it the best performing stock on New Zealand’s benchmark NZX 50 Index, after the outdoor apparel retailer delivered an upbeat presentation about its outlook.
Kathmandu rose 6 percent to $3.90 and has gained 38 percent in the past 12 months. Third quarter sales rose 3.6 percent to $93 million as the retailer benefited from strong Easter sales, the company said in presentation notes for the Macquarie Australian Connections conference. Excluding changes in the exchange rate, sales rose 12.9 percent while the gross margin was in line with the prior year, the Christchurch-based company said.
Kathmandu, which sells outdoor clothing and equipment, said it remains confident of “a strong performance” for the full year, citing analyst expectations for a 3.8 percent rise in net profit to $45.9 million and a 5.5 percent increase in sales to $405 million.
The company revised up its store target for Australia and New Zealand to 180 from a previous aim of 170 based on the success of its new format, and said it is on track to open 15 new stores in the current financial year through July.
The winter sales period through June and July is Kathmandu’s largest annual promotional event and the company indicated the weather around this period was the key variable to its success. Easter sales benefited from late Easter holiday timing this year and a change to cooler weather in Australia and New Zealand, it said.
The stock is rated an average ‘buy’ according to analysts polled by Reuters.