Kathmandu shares climb on stronger sales figures
KATHMANDU'S share price received a welcome boost on Friday after the company announced stronger than expected sales for the financial year to date.
KATHMANDU'S share price received a welcome boost on Friday after the company announced stronger than expected sales for the financial year to date.However, it warned against reading too much into what is traditionally its quietest trading period.The shares jumped as much as 8 per cent at one stage, before closing 4.4 per cent, or 6? higher at $1.41 after Kathmandu told investors at its annual meeting that year-to-date sales were up 19.5 per cent.Same-store sales - excluding stores opened during the year - grew by 14.3 per cent during the period, compared with 7.6 per cent in the same period last year.The chief executive, Peter Halkett, said the period traditionally provided only 16 per cent of its business, but added: "This is obviously a very positive sign for us."A better gauge of Kathmandu's performance for the year will be provided by the Christmas trading period, as well as the second half, which has historically accounted for 58 per cent of sales and almost all of its earnings growth.The company reaffirmed its commitment to opening new stores, with 15 targeted across Australia and New Zealand for 2012-13."Not too many retailers will have this kind of roll-out plan available to them," Mr Halkett said. "We will open nine more stores by Christmas, the equivalent last year was five. And it is not about growing stores but also upgrading current ones."He said the market did not really understand how great an opportunity Australia remained for Kathmandu. The per capita spending on its products stands at just $10.34, compared with $31.31 in New Zealand.The Kathmandu chairman, James Strong, addressed investor concerns about the share price, which has languished since the company first listed three years ago."When the company was floated, it was before the retail economic downturn, and the pricing was based on the growth in the earnings. After the float, we ran into the 'Myer effect' where retail stocks remain well below their floated price," Mr Strong said.Economic conditions were likely to continue to inhibit discretionary spending, Mr Halkett said.The company said it was committed to expanding in Britain, but would not be going in for a big store expansion, with sales growth being driven by its online service."People are buying our products. Removing seasonal effects, our outdoor category is on trend," Mr Halkett said.