Highlights

  • Kathmandu recorded year-to-date sales growth of 12.9% over the first five months of FY26.
  • Group sales increased 7.9% year-on-year, supported by direct-to-consumer channels.
  • KMD Brands expects first-half FY26 underlying EBITDA between NZD 8 million and NZD 11 million.

KMD Brands Limited (NZX:KMD) (ASX:KMD) provided a trading update for the first five months of the 2026 financial year, reporting year-on-year sales growth across the Group, led by continued momentum in the Kathmandu brand. The update, covering the period from August to December 2025, highlighted growth in direct-to-consumer sales, steady wholesale performance, and an improvement in underlying earnings expectations for the first half of FY26.

Kathmandu Leads Brand-Level Sales Growth

Kathmandu emerged as the primary contributor to Group sales growth during the period. For the first quarter of FY26, covering August to October 2025, Kathmandu sales rose 13.9% year-on-year. This momentum continued into the second quarter to date, with sales for November and December increasing 12.1%. On a year-to-date basis, Kathmandu sales were up 12.9%.

Same-store sales, including online channels, increased 12.7% year-on-year for the 23 weeks ended 4 January 2026. Growth was recorded across both Australia and New Zealand, with elevated demand during the Black Friday and Christmas trading periods contributing to the result.

Group Sales Supported by Direct-to-Consumer Channel

At the Group level, total sales increased 7.9% year-on-year for both the first quarter and the five-month year-to-date period. Sales growth of 8.0% was recorded in the second quarter to date.

The improvement was primarily driven by the direct-to-consumer channel, particularly across the Kathmandu brand. Rip Curl recorded year-to-date sales growth of 5.6%, while Oboz posted year-to-date growth of 4.5%, supported by a recovery in the second quarter following a softer first quarter performance.

Group wholesale sales for the five months to December 2025 were 9.4% above the same period last year. Forward wholesale order books were reported to be stable and slightly higher than the previous year, with in-season buying from key accounts remaining positive.

Margin, Earnings, and Balance Sheet Update

Group gross margin for the year-to-date period stood at 56.7%, approximately 100 basis points lower year-on-year. The change was attributed to higher promotional activity across the retail sector and a focus on clearing aged inventory. Gross margin for the period remained above the level recorded in the second half of FY25.

KMD Brands expects underlying EBITDA for the first half of FY26 to be in the range of NZD 8 million to NZD 11 million, compared with NZD 3.9 million in the prior corresponding period.

As part of its refinancing strategy, the Group extended its existing debt facility to April 2027 and adjusted covenant settings for upcoming measurement periods. Total syndicated bank facilities were reduced to approximately NZD 283 million. Net debt at 31 January 2026 is expected to be between NZD 85 million and NZD 90 million, compared with NZD 76.2 million a year earlier, influenced by movements in the New Zealand dollar.

Share Price Snapshot

KMD Brands Ltd shares closed at NZD 0.26 on 2 February, down 3.64% for the day. The stock has declined 5.36% over the past month and is down 33.75% over the past year.