Outdoor clothing retailer Kathmandu has reported a 21.6 per cent increase in earnings before interest and tax (EBIT) to $15.2 million, for the six months ended 31 January 2011.
Meanwhile, net profit after tax (NPAT) was up to $8 million from $4.4 million as was sales, which was up 13.5 per cent to $97.4 million.
CEO Peter Halkett said the positive results were due to the new products and ranges released in summer.
“This is the first six month trading period that reflects the outcome of key growth initiatives, in particular an increased long term investment in inventory, that are now able to be pursued under our new capital structure with lower debt levels. We have seen strong ongoing same store sales growth in Australia and New Zealand since early December,” he said.
“During the December and January trading period, weather conditions were also favourable for sales in some categories, particularly in Australia given the relatively cool and unusually wet summer on the east coast.”
The company saw same store sales growth of 12.1 per cent and gross profit margin increase from 61.3 to 64.7 per cent.
“The higher same store sales increase in Australia reflected greater product focus and investment, growing brand awareness and favourable weather conditions in that market,” Halkett said.
Kathmandu said that it will continue on delivering its targeted store rollout plan, make ongoing investment in inventory and the maintenance of an aggressive marketing programme.
It says the uplift of the first half year sales and profitability provides a solid start for the outlook ahead, where it is cycling against a weaker trading performance in the second half year FY10, whereas first half year FY10 was a strong period.
However given Kathmandu’s annual trading pattern the overall result for the year remains dependent upon the second half year performance and in particular the key winter sales trading period at the end of the financial year.
“Winter sale remains our largest annual promotional event, and this means we must successfully execute our strategies until virtually the last day of winter sale before we can be confident about our overall year’s result,” Halkett said.
“Nevertheless we’ve had a successful start and we are now well positioned to improve our year on year performance.”