On the morning of its annual meeting in Sydney, KMD Brands, the company behind Rip Curl and Kathmandu, found some footing after a strong opening to its fiscal year, with sales and profits rising by double digits and a stubborn supply problem finally eased. Yet the share price still sits well below where it stood a year ago, a reminder that a retailer's fortunes move with the mood of its shoppers. Its chief executive named China as a distant horizon rather than a near destination, choosing to keep the company's energy on the markets it already knows. Whether that patience is wisdom or caution w
KMD Brands Eyes China as a Longer-Term Goal as First-Quarter Sales Surge
China is a possible goal, but not on deck in the immediate future
Mark
So the headline is China, but Daly basically said not yet. Why does that matter?
Mimi
Because the question was natural. Outdoor and camping are booming in China, and KMD sells exactly that lifestyle. He acknowledged the size of the market but put Australasia, Europe and North America first.
Luke
Worth noting what he didn't say. There's no timeline, no budget, no entry plan. "Continue to consider our options" is not a commitment.
Mark
And the share price jumped the same day.
Mimi
Up 6.77 per cent to $1.025, after the company said first-quarter sales and profits grew by double digits and the US boots supply chain problems were fixed.
Luke
Be careful linking those to the China comments. The jump was tied to the trading update. Also, the reporting says double digits, not exact figures, so we can't size the growth.
Mark
Is the stock actually healthy, then?
Mimi
It's been falling over the past year, from $1.44 to around $1.025 after the rise. So it's a good day inside a weaker year.
Luke
Right, and one morning's gain in early trade says little about where it closes or what comes next.
Mark
What about Daly's tone?
Mimi
Cautiously optimistic, with inflation and rising interest rates as the risk to consumer sentiment.
Luke
That's his outlook, not a forecast the reporting can verify. Whether shoppers actually pull back is still unknown.
O Pulso
- Shares jumped 6.77 per cent to $1.025 on the morning of the annual meeting, offering a welcome jolt after a long slide.
- Double-digit growth in first-quarter sales and profits arrived alongside the resolution of supply chain snarls in the US boots business.
- Shares remain stubbornly below the $1.44 they fetched a year earlier, leaving investors wary of whether the recovery will hold.
- Chief executive Michael Daly put China on a longer-term list, deliberately refusing to set a timetable for entry.
- Inflation and rising interest rates threaten to squeeze discretionary spending, and Daly is only cautiously optimistic.
- The company is keeping its focus on Australasia, Europe and North America while watching whether momentum survives.
On the morning of its annual meeting in Sydney, KMD Brands, the company behind Rip Curl and Kathmandu, found some footing after a strong opening to its fiscal year, with sales and profits rising by double digits and a stubborn supply problem finally eased. Yet the share price still sits well below where it stood a year ago, a reminder that a retailer's fortunes move with the mood of its shoppers. Its chief executive named China as a distant horizon rather than a near destination, choosing to keep the company's energy on the markets it already knows. Whether that patience is wisdom or caution will be shown by how ordinary households spend in the months ahead.
On the morning of its annual meeting in Sydney, KMD Brands, the company behind Rip Curl and Kathmandu, saw its shares climb 6.77 per cent to $1.025 on the ASX. The gain followed news that sales and profits had risen by double digits in the first quarter of fiscal 2023, and that supply chain problems hobbling its US boots business had been resolved. Shareholders arrived to a more hopeful start than the share price history might suggest.
That history is less kind. The stock has slid over the past year and still trades well short of the $1.44 it fetched twelve months earlier.
At the meeting, chief executive Michael Daly was pressed on China, where camping and outdoor travel are booming. He acknowledged the market's size but offered no timetable, saying China sits on the company's longer-term list while the immediate focus stays on Australasia, Europe and North America. He described himself as cautiously optimistic, aware that high inflation and rising rates could dent the spending of shoppers.
The open questions are whether the quarter's momentum holds, whether the share price recovers, and whether China moves from consideration to commitment.
On the morning of its annual meeting in Sydney, KMD Brands, the company behind Rip Curl and Kathmandu, saw its shares climb 6.77 per cent to $1.025 on the ASX, making it one of the better performers in early trade. The move followed an announcement that sales and profits had risen by double digits in the first quarter of fiscal 2023.
The same update carried a second piece of good news. Supply chain problems that had snarled the company's US boots business, the source of some earlier frustration, were now resolved. Together, the two disclosures gave shareholders a more upbeat start to the meeting than the share price history might have suggested.
That history is less flattering. The stock has been sliding over the past year, and the morning's gain still left it well short of the $1.44 it traded at twelve months earlier. The company is dual listed, and the price quoted applies to the ASX shares.
At the meeting, chief executive Michael Daly was asked, in effect, about China, where camping and outdoor activities have become one of the hottest new trends in the travel industry. For a company whose brands are built around surf and the outdoors, the market is an obvious subject of interest. Daly acknowledged its importance but did not offer shareholders a timetable.
"China along with many countries around the world are on our longer-term list of countries to focus on," he said, "but our immediate focus is on our existing key markets in Australasia, Europe and North America." He added that the company had not lost sight of the size of the Chinese market and would continue to consider its options as it moves forward.
In other words, China is a possible longer-term goal, not something on deck in the immediate future. The priority remains the regions where KMD already operates: Australasia, Europe and North America.
Daly also struck a measured note on the outlook more broadly. He described himself as "cautiously optimistic", even with the possibility that high inflation and rising interest rates could dent consumer sentiment. That caution matters for a retailer whose sales depend on discretionary spending, and it frames the strong first quarter as a result to be protected rather than assumed.
What to watch now is whether the quarter's momentum holds as inflation and rate rises weigh on shoppers, and whether the share price, still below where it stood a year ago, continues to recover. China remains a question the company has said it will keep considering, without commitment for now.
Citações Notáveis
China along with many countries around the world are on our longer-term list of countries to focus on, but our immediate focus is on our existing key markets in Australasia, Europe and North America.— Michael Daly, KMD Brands CEO
Daly described himself as cautiously optimistic despite possible high inflation and rising interest rates.— Michael Daly, KMD Brands CEO (paraphrased)
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Leia o original em Australian Financial Review ↗
Economy & Finance