Kathmandu says first half profit slightly stronger on increased Australian sales

Kathmandu Holdings said first-half profit was slightly higher from a year earlier, partly bolstered by solid same store sales growth.

Kathmandu Holdings said first-half profit was slightly higher from a year earlier, partly bolstered by solid same store sales growth.

The Christchurch-based outdoor equipment chain said net profit was $9.9 million on year in the six months to January 31, versus $9.4m a year ago. Total sales were about $196.3m compared to $196m for the comparative prior period. The same stores sales growth, which is calculated for the 26 weeks to Janruary 27, was up 3.4 per cent on a constant currency basis.

"Despite gross margin pressure in the first half from foreign currency, we were able to grow our earnings through healthy same store sales growth in our largest market, rigorous cost control and working capital efficiency," said Kathmandu's chief executive Xavier Simonet.

In November the company said it was on track to meet the prior year's first half result despite pressure on sales growth. The shares were trading up 2.1 per cent at $1.94 after Tuesday's announcement.

Australia continues to generate most of the company's sales with total sales of A$121m, up 6 per cent in Australian dollars and 1.8 per cent in New Zealand dollars. Australian same store sales growth was up 5 per cent in local currency and 0.8 per cent in New Zealand dollars.

Kathmandu's annual profit rebounded in 2016 from a slump a year earlier after a build-up of inventory forced it into aggressive discounting at lower margins to rid itself of excess stock. Under the management of Simonet, who was appointed to the role in January 2015, the company has been taking a more cautious approach to sales and keeping expenses under control.

Kathmandu will release the full result for the first half on March 21.