Kathmandu Holdings expects first-half profit to be in line with last year's as it struggles to grow sales and maintain margins.
"Through careful management of gross margins and operating expenditure, we remain on track to match last year's first-half profit result despite pressure on sales growth," chief executive Xavier Simonet said in a trading update posted to the stock exchange. He added that the result was "highly dependent" on the more significant Christmas and January trading periods.
Kathmandu shares fell 2.1 per cent to a three-month low of $1.84.
The company didn't provide specific figures but in the previous first-half period ended January 31, it posted profit of $9.4 million, sales of $196m, and a gross margin of 62.8 per cent. In the first quarter of its current financial year, covering the 15 weeks ended November 13, the gross margin was lower primarily due to changes in currency rates, operating expenses were lower, and the working capital position had been maintained or improved with lower net debt and stock per store, the Christchurch-based retailer said in its update prepared for delivery at its annual meeting of shareholders today.
Its first-quarter sales fell 0.6 per cent, the company said. On a constant currency basis sales rose 2.8 per cent. The company's currency conversion rate so far this year was 95.10 Australian cents, compared with 90.80 cents for its 2016 financial year, and 56.50 British pence, from 42.40 pence last year, it said.
