Kathmandu shares drop after 'disappointing' Christmas

Kathmandu chief executive Xavier Simonet. Photo/Supplied.

Kathmandu's share price dropped by 8 per cent after the company said its sales over the Christmas and Boxing Day period had been disappointing.

By late morning, shares in the outdoor goods retailer were down by 22 cents at $2.52.

The company said at its annual meeting on November 23 that, based on trading during the first 15 weeks of the fiscal year, its first-half profit was expected to be "strongly above" last year, depending on how its summer sale performed.

Now, it appeared that a 4 to 8 per cent gain was likely, it said.

In a statement today, management said sales during December had been below expectations.

"Following strong same-store sales growth in Q1, we are disappointed in trading results in Australia and New Zealand over the Christmas and Boxing Day period," chief executive Xavier Simonet said.

"Despite sales being below expectation, it is pleasing to see the improvement in retail gross margin and continuing strong growth from the recently acquired Obōz business," he said.

Same-store sales for the 22 weeks ending December 30 were below prior the prior year's by one per cent - at constant exchange rates.

Same-store sales were below prior year by 0.2 per cent in Australia, and below prior year by 2.4 per cent in New Zealand.

Partially offsetting lower than expected sales to date for the first half was is a 60 basis point improvement in retail gross margins to about 64 per cent.

Obōz sales for the first half were expected to grow by about 35 per cent to approximately $27.5m, with a gross margin of 40 per cent.

"Notwithstanding the adverse impact of the NZD/AUD exchange rate on reported profit, assuming current trends continue, total group profits are now expected to be 4 - 8 per cent above the first half of 2018," the company said.

Kathmandu will release the full result for the half year on Tuesday 26 March 2019.

The company's shares last traded at $2.60, down 14 cents.