Kathmandu counts on ‘revenge’ being sweet

KATHMANDU chief executive Michael Daly is tipping a wave of “revenge spending” as consumers are released from lockdowns and spend up on everything from tents and camping gear to puffy jackets and boots to enjoy the great outdoors again.

Mr Daly said Kathmandu, which issued its full-year results on Tuesday showing strong results from surfing brand Rip Curl and hiking boots outfitter Oboz, had high expectations for Christmas.

“In terms of our history and what we have seen in the past is that when lockdowns open up quite often there can be a bit of a bounce, revenge spending, or whatever they are calling it these days . . . just getting back to normal life and enjoying holidays, enjoying camping and getting out in the outdoors,” he said.

Pent up spending unleashed by consumers was evident in other parts of the business, particularly in opened up economies across the US and Europe.

A wave of renewed participation in surfing and hiking had helped drive surging profits for Kathmandu’s key retail brands, Rip Curl and footwear group Oboz in 2021, but protracted lockdowns in Australia and New Zealand over winter hacked away at profits for the core Kathmandu adventurewear brand.

This divergence in the performance of the retailer’s three arms did not, however, put a cap on profitability with Kathmandu reporting total profits had risen to $NZ63.4M ($A61.5m) for fiscal 2021, up strongly from the $NZ8.868M posted in 2020.

The retailer did warn that due to restrictions caused by

Covid-19 its sales since September had suffered and that it was expecting first half fiscal 2022 profit to be below the first half of 2021.

Kathmandu also revealed it had been hurt by supply constraints and escalating costs of freight and shipping.

Leisure activities, outdoor recreation and other recreational pursuits looked to have been impacted in different ways through fiscal 2021, as lockdowns and the closure of international borders delivered a mixed result.

Rip Curl booked a 55.3 per cent lift in sales to $NZ490.4M and a 1252.4 per cent surge in earnings before interest and tax to $NZ56.9M, underpinned by growth in surfing.

But the Kathmandu retail arm suffered, with its sales falling 17 per cent to $NZ354M and EBIT plummeting 48.8 per cent to $NZ26.3M.

Oboz bolstered by a strong uplift in hiking participation, posted a 44.9 per cent lift in sales to $NZ78.4M as EBIT rose 72.6 per cent to $NZ11.4M.

Kathmandu reported that group sales for the 12 months to July 31, were up 15.1 per cent to $NZ922.8M below guidance of about $NZ930M.