Kathmandu Holdings stock have plunged 25 per cent to a two-and-a-half year low after the outdoor goods retailer said Christmas and January trading lagged behind expectations, resulting in a first-half loss.
The loss was $1 million-to-$2 million in the 26 weeks ended January 25, compared with a profit of $11.4 million in the same period a year earlier, the Christchurch-based company said in a statement. First-half sales rose 6.9 per cent to $179.2 million.
The company's shares slid 51 cents to $1.50, the lowest level since August 2012. The fall has wiped more than $100 million off the companies market value this morning.
Kathmandu's earnings failed to meet its expectations during the first half of its financial year after it discounted prices to clear out excess stock, particularly in Australia, which hurt margins. Sales of summer and non-technical clothing didn't meet forecasts across Christmas and January while in New Zealand, sales of cold weather clothing declined after Christmas during an extended period of dry and warm weather.
"It's clearly worse than the market expected," said Matt Goodson, who holds the stock among the more than $700 million in equities he helps manage at Salt Funds Management. "It is critical that they have strong Easter and winter sales."
