Highlights

  • KMD Brands reported stronger year-on-year sales growth across most brands in Q3 FY26.
  • Gross Margin improved across the Group as operational and pricing strategies gained traction.
  • The company announced a Business review aimed at improving Shareholder returns.

Overview

KMD Brands Limited (NZX:KMD) reported continued operational improvement during the third quarter of FY26 as the Group advanced execution of its Next Level strategy. Sales growth remained positive across Kathmandu and Rip Curl, while Group gross margin improved significantly year-on-year. Kathmandu maintained strong momentum in Australia and New Zealand as customers responded positively to product innovation and merchandising improvements. The Group also continued strengthening digital capability and store network optimisation initiatives. Despite softer consumer sentiment linked to geopolitical tensions, rising living costs, and higher interest rates, KMD Brands remains focused on cost discipline, margin expansion, and long-term shareholder value creation through operational execution and a newly announced business review.

How Did Kathmandu and Rip Curl Support Group Growth?

Kathmandu delivered another quarter of strong sales momentum, supported by improved product innovation, enhanced assortments, and stronger customer engagement across both Australia and New Zealand. The Brand also improved gross margin through better product mix and markdown management strategies. Rip Curl maintained positive sales growth despite a more challenging consumer environment following geopolitical tensions and rising fuel prices. North American flagship stores continued performing strongly while the brand also benefited from favourable foreign exchange impacts. Gross margin expansion across both brands reflected disciplined promotional activity and ongoing operational improvements.

Why Is KMD Brands Undertaking a Business Review?

KMD Brands announced a comprehensive business review focused on identifying opportunities to improve shareholder returns and strengthen the Group’s overall value proposition. The review will assess the company’s Capital Structure, portfolio configuration, and other strategic opportunities that could accelerate value creation. Alongside the review, the Group continues progressing its Next Level strategy through disciplined cost control, digital execution, and store network optimisation initiatives. Management expects further operational benefits from cost-saving measures and improved online capabilities as the company continues adapting to challenging retail and consumer conditions globally.