Kathmandu shares slump 8.7% as warm winter crimps sales
Kathmandu shares slump 8.7% to four-month low as warm winter weather crimps sales
By Tina Morrison
June 24 (BusinessDesk) - Shares in Kathmandu Holdings slumped 8.7 percent, making them the worst performer on the benchmark NZX 50 Index, after the outdoor apparel and equipment retailer said its full-year earnings may decline as much as 15 percent as warmer weather crimps sales of cold weather products such as down jackets, fleece and thermals.
The Christchurch-based company said earnings before interest and tax will probably fall by 10 to 15 percent in the 11 months ending June 30, as sales through June, during the company's winter sales promotion, have been "significantly below expectations" in its main markets of Australia and New Zealand.
Any recovery in trading during July, the last month of its financial year and the company's third biggest trading month, will probably not be sufficient to make up the shortfall in sales experienced to date in June, the company said. If the unseasonal warm weather continues through July, full-year Ebit would likely fall 10 to 15 percent from last year's $63.4 million, the company said. Before today's announcement, analysts were expecting Ebit this year of $68.6 million, according to Reuters.
Shares in the company dropped 31 cents to a four-month low of $3.25.
Kathmandu expects to provide an update on earnings in early August and publish its results on Sept. 22, it said.