Kathmandu warns on retail sector

Retailer says conditions remain challenging; unveils sales of $70.9m in the first 16 weeks of FY14, a 0.9% year-on-year increase.

Kathmandu Holdings Ltd has warned conditions in Australia remain challenging for discretionary retail categories, but that it is well placed to deal with the environment.

However, chairman John Harvey told shareholders at Kathmandu's annual general meeting that the retailer was "not immune from economic uncertainty."

"On the positive side, we believe this is also a time to take the opportunity to invest to grow our business, and we are confident Kathmandu’s strong market position will continue to be enhanced, even if there are tougher times ahead for our category," Mr Harvey said.

Kathmandu chief executive Peter Halkett reiterated Mr Harvey's concerns saying economic conditions remain uncertain globally, and particularly in Australia, while consumers were cautious with discretionary expenditure.

The comments came as Kathmandu unveiled sales of $70.9 million for the 16 weeks to November 17, a 0.09% increase on the previous corresponding period. 

In the same period, same store sales growth was over three per cent in both Australia and New Zealand. 

Mr Halkett said despite "difficult retail trading conditions" the sales performance in was largely in line with expectations.

He said the group's first-half profit result remained highly dependent on the Christmas and January trading period.