Outdoor wear retailer Kathmandu has sounded a cautious note despite a strong recovery in sales since reopening stores in May after coronavirus restrictions were eased in Australia and New Zealand.
It expects full-year earnings before interest tax depreciation and amortisations to be above $70 million but says there remains significant downside risk over future economic conditions.
The company had reported EBITDA of $99.6 million in FY19.
Kathmandu said total group sales for the 10 months ended 31 May 2020 were 15.1 per cent below the comparable period last year but since reopening stores, the group’s retail and online sales had exceeded management expectations.
Same store sales for the six full weeks to June 28 at Kathmandu are up 12.5 per cent, including retail stores up 2.2 per cent, and online up 78 per cent. For Rip Curl, same-store sales are up 21 per cent, reflecting retail stores up 5.1 per cent and online up 151 per cent.
However, the company said wholesale sales for the period to the end of May had been substantially affected by COVID-19.
Rip Curl wholesale sales, in particular, were 26 per cent below those in the same period last year.
“We believe that some short-term factors, including government support packages and pent-up demand are underpinning current sales,” group chief executive Xavier Simonet said.
“Whilst we are pleased with the strong recovery in direct to consumer sales over the past six weeks, we remain cautious about medium-term levels of consumer demand.”