KMD - Kathmandu

[Waltzing]

usually buy a big travel trolley bag for accessories and sports equipment.

still got the same gear from 2019....

havnt bought anything from KMD except a big surf beach dual designed tent umbrella..

cant see this share going anywhere for a while.

cant see its safe to travel by air anywhere yet if you value your VO2 Max.

most high performance athletes will still be in hiding or have retired if there is even going to be a next Olympics..

[Habits]

On 23 Feb I sold virtually all of my holding at 1.33 each. There has been no movement in the month since, which is good that the sp has held firm. The bad news is out of the way and hopefully sales and profits will ramp up. GLTAH

[Recaster]

This company has had an especially difficult time of it during the Covid period. Lots of optimistic noises from management and they even paid a large dividend despite losing money in the latest interim period.

My analysis:

https://recastinvestor.substack.com/p/basic-analysis-kmd-brands-kmdnzx

[Ferg]

This company has had an especially difficult time of it during the Covid period. Lots of optimistic noises from management and they even paid a large dividend despite losing money in the latest interim period.

My analysis:

https://recastinvestor.substack.com/p/basic-analysis-kmd-brands-kmdnzx

Thanks for sharing Recaster and nice work.

3 things that possibly require further comment:
1) How is the latest dividends being funded? Is operating cashflow enough to cover the dividend? Or is this being funded out of debt?**
2) Inventories have increased on reduced sales. Does this mean there will be inventory provision problems in future? Or is there a trend we are not seeing in just the last 2 years?
3) Why did the Kathmandu segment make a loss? I am surprised by that.

Another thing that would be good to see in your analysis is how we get from Revenues to EBIT, at both the total and operating division levels, i.e. Revenues less Variable Costs (being COGS & selling & dist. costs if published) gives gross margin less overheads (admin, depreciation etc) gives EBIT with YoY % changes like the rest of the P&L. That will provide insights as to issues with margins and/or overheads etc.

Nice work. Keep it up!

**I see you touched on this in your analysis. Given debts were also reduced in that period, the historical dividend was paid from cash reserves. Given operating cash flow was negative without the prior dividend payment, then the next dividend is coming from cash again, or being funded by debt. That raises questions around sustainability of future dividends.

[Waltzing]

Look over priced at present and maybe they expect a big bounce back FY23.

[nztx]

Anyone remember the following announcement:

1 April 2020 to strengthen their balance - what got paid back that they had on board then ?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/351066/320084.pdf



Equity Raising highlights

• Kathmandu Holdings is taking pre-emptive action to fortify its balance sheet in conjunction with the
aggressive and significant cost savings and structural cost reduction initiatives the Group is implementing
in response to the global COVID-19 pandemic (COVID-19).

• The Group has launched a fully underwritten $207 million Equity Raising at an offer price of $0.50 per share
via a $30 million Placement to certain institutional investors, together with an approximately $177 million
1.2 for 1 pro-rata accelerated Entitlement Offer (together, the Equity Raising).

• Post-raising, the Group will be strongly capitalised through the current market uncertainties caused by the
global COVID-19 pandemic.

Kathmandu Holdings has announced that it intends to raise approximately $207 million to strengthen its balance
sheet and ensure the Group is strongly capitalised through the current market uncertainties caused by COVID19.


Any guesses on why there is mayhem in the KMD engine room ?

ie: Sell Product in volume, Make good margin, optimise retailing expenses to produce a glowing bottom line

Wasn't a fair chunk of debt supposed to be gone with last Cap Raise ?

Or did more get reborrowed courtesy of trying to bridge the Covid troughs on a hope ?

Buying screw up issues, Supply issues ? Store costs issues ? Natural events ? Time to start weeding out poor performing store issues, or other issues ?

With Inventory management systems etc today, these guys should in real time how their weeks & months
are going - make no mistake about that :)

If Management don't get on top of it - another Cap Raise ? or worse perhaps ?

Do Board have it in them to navigate in anything other than smooth waters fully provisioned
with heaps of stakeholder loot stashed away ? Sure any amount of money in kitty can at times
come handy to fog over glaring issues in the lower decks, until things become really telling..

Perhaps the older inhouse store brands are getting a bit tired - some possibly should have been retired
with the last acquisition, which for sure is showing up the lesser performing ones it joined onboard :)

In case of a further CR who wants to throw a further handful of bucks at something that has already
swallowed a fair bundle and the Board still haven't come up with results to suggest everything is sailing
smoothly, is under control , but instead may be sailing close to the wind Dividend/profitability wise ??

[Recaster]

Thanks for sharing Recaster and nice work.

3 things that possibly require further comment:
1) How is the latest dividends being funded? Is operating cashflow enough to cover the dividend? Or is this being funded out of debt?**
2) Inventories have increased on reduced sales. Does this mean there will be inventory provision problems in future? Or is there a trend we are not seeing in just the last 2 years?
3) Why did the Kathmandu segment make a loss? I am surprised by that.

Another thing that would be good to see in your analysis is how we get from Revenues to EBIT, at both the total and operating division levels, i.e. Revenues less Variable Costs (being COGS & selling & dist. costs if published) gives gross margin less overheads (admin, depreciation etc) gives EBIT with YoY % changes like the rest of the P&L. That will provide insights as to issues with margins and/or overheads etc.

Nice work. Keep it up!

**I see you touched on this in your analysis. Given debts were also reduced in that period, the historical dividend was paid from cash reserves. Given operating cash flow was negative without the prior dividend payment, then the next dividend is coming from cash again, or being funded by debt. That raises questions around sustainability of future dividends.

Thanks so much Ferg for the comments and encouragement. It's appreciated!

I'm transitioning from credit analysis to equity analysis and there are differences.

I'll amend my analysis to take into account your suggestions (which are all excellent) and provide the extra information in future analyses.

Cheers.

[Waltzing]

"In case of a further CR "

next 6 months will tell but not sure KMD will return to anything like pre C until tourism is big again?

Yep the P&L looks like it took a hit alright.

[Rawz]

KMD a bit of a dogs breakfast, has been for years.

Should have let Rod Duke buy it and shareholders get shares in BGP. Would have worked out far far better for them.

Worst nzx retail stock!

[nztx]

Wonder if MHJ want to lend KMD their expert on "how to breathe life into a Dog hobbling along on three legs" ? ;)

[Rawz]

Wonder if MHJ want to lend KMD their expert on "how to breathe life into a Dog hobbling along on three legs" ? ;)

Step 1: New CEO and CFO
Step 2: Close all non performing stores
Step 3: Stop gimmicky promotions
Step 4: Incentivize sales team with new commission structure
Step 5: Appoint online guru to leadership team to massively grow online sales
Step 6: Bring in guru chairman Fyfe
Step 7: Build massive cash pile with all time high margins
Step 8: Blow massive cash pile on silly acquisition in NA or Europe
Step 9: See step 1 lol

[Muse]

Step 1: New CEO and CFO
Step 2: Close all non performing stores
Step 3: Stop gimmicky promotions
Step 4: Incentivize sales team with new commission structure
Step 5: Appoint online guru to leadership team to massively grow online sales
Step 6: Bring in guru chairman Fyfe
Step 7: Build massive cash pile with all time high margins
Step 8: Blow massive cash pile on silly acquisition in NA or Europe
Step 9: See step 1 lol

Lol nailed it

[Recaster]

Updated analysis to take into account comments and suggestions from Sharetrader members:

https://recastinvestor.substack.com/p/basic-analysis-kmd-brands-kmdnzx

[winner69]

KMD market cap still less than what is was in late 2019

Must mean something

[Maxtrade]

KMD market cap still less than what is was in late 2019

Must mean something

Couple of large volume sells through today, anyone happen to know who the seller is, several million shares. Due to not having many buyers in market today has subsequently driven the SP down pretty low. Buying opportunity possibly now!? Thoughts guys?

RSI sub 30, oversold signalling buying op, who's on board?

[Sideshow Bob]

KMD market cap still less than what is was in late 2019

Must mean something

Means their share price is bio-degradable, just like their new jackets.

Kathmandu NZ (https://www.kathmandu.co.nz/responsible-design-earth-friendly-jacket)

[Maxtrade]

Means their share price is bio-degradable, just like their new jackets.

Kathmandu NZ (https://www.kathmandu.co.nz/responsible-design-earth-friendly-jacket)

Have we missed an announcement, todays extreme fall currently 8% and still dropping is not making sense?

[winner69]

Have we missed an announcement, todays extreme fall currently 8% and still dropping is not making sense?

Somebody dumped a few million at 115

Wonder who bought those?

[Maxtrade]

Somebody dumped a few million at 115

Wonder who bought those?

Yeah did you catch the bounce back, up 5% so far in an afternoon trade, happy with that.

Maybe John Harvey selling out holdings. Hmmm in that case might not be done, could well be more to follow. Will need to check on his current holdings.

if so repeat...
1. Sell now
2. Take the 5-7% days profits (if noted oversold RSI post earlier)
3. Wait for the next parcel volume sell, either at close today or in the following day or 2. Buy back in on the threshold of dip likely ~1.10-1.13 - if not finished and second subsequent sell down follows.
4. Take profits and repeat

[Entrep]

KMD Brands Trading Update


o Record performance in Kathmandu's key winter promotional period.
o Rip Curl continues to trade strongly across retail and wholesale channels.
o Oboz suppliers have resumed full production following COVID-related factory
closures, and inventory levels are recovering. Wholesale demand for Oboz
products remains significantly above pre-COVID levels.
o Retail trade in Australasia was impacted by the Omicron outbreak,
particularly during the third quarter.
o Underlying FY22 EBITDA (1) is expected to be in the range of $88 million to
$94 million, and underlying EBIT (2) $53 million to $59 million.

KMD Brands Limited (ASX/NZX: KMD, "KMD" or the "Company") provides the
following update on trading performance for the year ending 31 July 2022
("FY22").

Total sales are expected to be in the range of $955 million to $965 million.
Underlying EBITDA (1) is expected to be in the range of $88 million to $94
million, with underlying EBIT (2) in the range of $53 million to $59 million.

As previously communicated, the year-on-year impact of COVID on first half
EBITDA was approximately $35 million. Trading conditions have improved in the
second half, however COVID continued to impact footfall, particularly in the
third quarter, and caused sporadic store closures due to staff availability.
Same store sales year-to-date ("YTD") remain positive for both Rip Curl and
Kathmandu, despite the significant COVID impacts on retail. YTD direct to
consumer ("DTC") same store sales (including online) for the 49 full weeks to
10 July 2022:

Same Store Sales YTD
Rip Curl +2.1%
Kathmandu +7.3%

Group CEO and Managing Director Michael Daly said:

"Rip Curl's wholesale and direct-to-consumer retail channels continue to
perform well. Wholesale order books are above prior year levels as we look
forward to next year."

"Pleasingly, Kathmandu has experienced a record winter promotional period in
Australia. Second half gross margins are well above last year due to a
combination of currency benefit and updated promotional execution. Trading in
New Zealand was weaker than in Australia reflecting lower growth in consumer
footfall and revenues, offset by improved gross margins reflecting the
deliberate strategy to carefully moderate the historic "high-low" pricing
model. While Q3 was impacted by the ongoing COVID outbreak in both counties,
Q4 profitability is expected to be above pre-COVID levels absent of any new
government restrictions."

"Oboz is recovering from the three-month COVID closure of Vietnam factories
in the first half, compounded by shipping congestion and international
freight delays. Oboz has received approximately two hundred thousand pairs of
footwear in the past two months, as suppliers resumed full production.
Additional supply has been secured for future seasons to meet order book
demand."

"Inventory levels are forecast to be above last year, reflecting decisions
taken in the light of ongoing supply chain disruption, to accelerate orders
to meet forward wholesale orders and expected retail demand. Inventory
quality remains high, with depth in carry forward styles, and lower clearance
levels year on year."

"The Group continues to target our long-term objective of 0.5x net debt to
underlying EBITDA."

"We continue to deliver on our objectives to grow KMD into the leading family
of global outdoor brands by elevating digital infrastructure and the consumer
experience, leveraging operational excellence, and being a leader in ESG. KMD
is well positioned for growth as travel rebounds globally, and COVID impacts
on consumer behaviour and international supply chains ease."

[Maxtrade]

KMD Brands Trading Update

Pretty much as expected, do you think will affect SP in either direction?

[Waltzing]

better pay attention and run the number as winner(n>=n) will have his digital business math calculator running almost as fast as a GPU...

looks fully priced in already.

[Maxtrade]

Never a positive reflection on share price when CEO resigns. Low SP looking likely may continue to decline further, ouch. Are we going to see $1 level tested next!? Guess it depends on the Aus market and retail outlook there as that's where heaviest trading lays. Market open and close ASX will be interesting for KMD today and this week.

[LaserEyeKiwi]

Never a positive reflection on share price when CEO resigns. Low SP looking likely may continue to decline further, ouch. Are we going to see $1 level tested next!? Guess it depends on the Aus market and retail outlook there as that's where heaviest trading lays. Market open and close ASX will be interesting for KMD today and this week.

Although to be clear this is the Kathmandu brand CEO (Reuben Casey), not the KMD Group CEO (Michael Daly). Each Brand (Kathmandu, Rip Curl, Ozboz) has a “CEO” but they all report to the actual group CEO.

[Maxtrade]

Looking like its been establishing its boots and holding support at 1.08. Even in the midst of todays poor retail news coming out of the states have solid buy volume at 1.11. which would indicate a pending upward trend. Fact that SP didnt breakdown through 1.08 today and bucks general market daily momentum would indicate a rise. Any traders online noticing the same that wish to comment?

[Waltzing]

charts looks like a slow train wreck... and the bottom should at the dollar mark.

P/E suggests it fully priced for slow growth and the DIV is actually higher than it should be

you would need to have a good look at the consolidated cash flow statement and see how much and where was the div financed from and cant remember the numbers off hand

there are simply to many companies to check financial health this year.

winner usually has these numbers to hand.

[Maxtrade]

charts looks like a slow train wreck... and the bottom should at the dollar mark.

P/E suggests it fully priced for slow growth and the DIV is actually higher than it should be

you would need to have a good look at the consolidated cash flow statement and see how much and where was the div financed from and cant remember the numbers off hand

there are simply to many companies to check financial health this year.

winner usually has these numbers to hand.


Unlikely will see those levels, SP it's currently still down 50 to 60% from pre pandemic. Those investors and traders still looking to catch a 'bargain' still have eyes on picking up stocks for solid returns when it recovers. Everything is cyclical, the KMD group are still well positioned, not going to disappear far too established. There will be enough support ready to pounce on these low SP's as soon as any uptick in more positive outlooks. Seems to have formed a pretty solid support level where it currently is 1.08. Even amongst the previous weeks poor news events, one after the other yet SP has held steady. SP has more upside gains than down from where it is currently positioned.

[Maxtrade]

Unlikely will see those levels, SP it's currently still down 50 to 60% from pre pandemic. Those investors and traders still looking to catch a 'bargain' still have eyes on picking up stocks for solid returns when it recovers. Everything is cyclical, the KMD group are still well positioned, not going to disappear far too established. There will be enough support ready to pounce on these low SP's as soon as any uptick in more positive outlooks. Seems to have formed a pretty solid support level where it currently is 1.08. Even amongst the previous weeks poor news events, one after the other yet SP has held steady. SP has more upside gains than down from where it is currently positioned.

Solid support level formed 1.08/1.09, breakdown of 1.11 to be followed by steady rise back into 1.2's, relatively briefly pushing through 1.3's. Upside gains substantially outweigh any downside at this point.

[Waltzing]

certainly if we look at E1 and E2 coming in as markets update announcement predicts its a tab undervalued and over sold.

[Maxtrade]

Agreed St% 14.3.3, RSI hovering around 40. VIX and offshore markets showing more positive signs. KMD SP buying opportunity for a comfortable 10% gain once breaks through resistance 1.11/1.12

[BlackPeter]

Interesting:

CFO gets a big payout .... 227,000 + shares as conversion of performance rights.

https://announcements.nzx.com/detail/397050

Lets hope he is earning his keep.

[Maxtrade]

Agreed St% 14.3.3, RSI hovering around 40. VIX and offshore markets showing more positive signs. KMD SP buying opportunity for a comfortable 10% gain once breaks through resistance 1.11/1.12

Its only a matter of time BP, KMS sitting at current SP has found its floor, only one way for this stock to go here forth, pretty sure bet holding or entering at this current level low teens.

Seems a bit stuck in a traders holding pattern, buying selling 1.09 -1.12, making a few % on the minor swing movements and repeating. Need a break through of this level to move past this pattern then will be some more solid gains on the way back up..

[Waltzing]

the underlying chart pattern looks across 5 years to be a flattening here....

she flat as a pancake at the MO... summer coming to end across the NH and that only leave the SH for RIP curl...

Doco "Girls cant Surf" ....

[winner69]

A week or so to results and share price slip sliding away

Could be sub $1 at rate it’s going

Didn’t a guru broker analyst have a $1.75 target on this not long ago?

Must have changed it --- marketscreener has 3 targets - $1.40 - $1.60

Something not right here

[winner69]

the underlying chart pattern looks across 5 years to be a flattening here....

she flat as a pancake at the MO... summer coming to end across the NH and that only leave the SH for RIP curl...

Doco "Girls cant Surf" ....

Jeez waltz - you trying to convince yourself KMD doing ok

Yearly chart far from flat

but maxtrade and his mates waiting to poune once that rsi looks right

[Waltzing]

Retail getting a hammering on CNBC ... Uk retail down clothing taking a hit....

chart showed 170 high was 166...

now it cash is king ... deposit rates going up and that could mean selling of any and all stocks that are not staples..

gas spiking over night dutch futures showing an expected high in nov and december contracts.

gas contracts for 2023 dropping off.

[winner69]

Waltz ….what’s up with KMD share price

Surely worth more than buck with all the good Rip Curl is going to bring

[winner69]

Result out today I think

Won’t be that good but they’ll paint a bright outlook

Could be so bright the share price will rocket to $1.20 ..that’ll be cool

Those guru analysts can’t be wrong with their targets over $1.50

Sorry, meant to post yesterday as on open you might miss out on the real cheap shares at the Dollar Store

[BlackPeter]

Result out today I think

Won’t be that good but they’ll paint a bright outlook

Could be so bright the share price will rocket to $1.20 ..that’ll be cool

Those guru analysts can’t be wrong with their targets over $1.50

Sorry, meant to post yesterday as on open you might miss out on the real cheap shares at the Dollar Store

Well, if results are out today, than they certainly take their time. Too much coin to count?

Anyway - just noticed that NZ Superfund recently backed up another truck and filled them with KMD on special.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/398432/378591.pdf

Hey - if the smart money is buying, what could go wrong?

[Sideshow Bob]

https://www.nzx.com/announcements/399077

FY22 key highlights (vs FY21):
• Group sales up 6.2% to $979.8 million, a record for KMD Brands
o Continued growth in Rip Curl sales, highest-ever Kathmandu sales in Q4, and record order demand for Oboz products
• Gross margin maintained at 58.9% despite input cost pressure
• Underlying EBITDA of $92.0 million reflects the impact of Q1 Australasian lockdowns and Oboz supply chain COVID disruption
o Record second half Group sales and underlying EBITDA
• Statutory NPAT of $36.8 million; Underlying NPAT(1) of $36.2 million
• Strong balance sheet position supports investment in organic brand growth
• Final dividend of 3 cents per share (fully franked for Australian shareholders); total FY22 dividend of 6 cents per share represents a record $42.5 million dividends declared in FY22

[Bjauck]

https://www.nzx.com/announcements/399077

FY22 key highlights (vs FY21):
• Group sales up 6.2% to $979.8 million, a record for KMD Brands... NZ CPI was up by 7.3% in the June 2022 year.

[BlackPeter]

OK - a quite solid result, though we should not get too excited - either:

Inventory up, Receivables up and Intangibles up ... hmm.

RoE of 4.3 % isn't yet ready for the Guinness Book of records either, and in the combination with the high intangibles one could wonder, whether they paid too much for their intangibles, couldn't one?

Anyway - dividend (6 cts for the year) is amazing (considering the share price) and higher than their earnings for the year (5.1 cts per share), so board must be really optimistic.

Better not check the cashflow statements ... but hey,

NTA did go up by more than 10% ... (this is good :) ) reaching an outstanding 18.5 cents per share ( :eek2: ); Ah, well ...

what possibly could go wrong?

[Waltzing]

Imagine what will happen when thing get back to normal....

cheap but they did pay to much for the brands...

women on the pro tour now get much higher prize money

Surfing is big on some parts of the french coast..

a classic to check out how long they have been surfing in france is never ending summer 2.

endless summer 2....

expect this to sell off under a dollar ; start averging in now...

[Waltzing]

sellers moving in ....

[percy]

https://finnewsnetwork.us1.list-manage.com/track/click?u=4e327af0b9377422183e60879&id=900867fd8c&e=2039e3d3d1

[Waltzing]

Read ok then? looks like it... big summer coming for down under..bordes open and maybe some europeans wanting to escape a horrible winter up north?

[BlackPeter]

Read ok then? looks like it... big summer coming for down under..bordes open and maybe some europeans wanting to escape a horrible winter up north?

True .. what better way to avoid Putin's gas war? Fly to NZ, enjoy our summer and buy your gear at Kathmandu!

Just checked - flights from November seem to get more reasonable priced as well (if one avoids the holidays).

[Waltzing]

surfing by october this year then... crikey...

https://www.stuff.co.nz/national/300693773/get-set-for-another-scorching-summer-with-a-marine-heatwave-on-the-way

[BlackPeter]

America and Europe - here we come!

CEO does not lack ambitions:

https://www.nzherald.co.nz/business/what-expansion-looks-like-for-kathmandu-as-it-pushes-into-europe-and-north-america/IVH6U3VHCIMJ3BURBREUOW4DOE

(probably paywalled)

Strategy, though sounds sensible:


KMD Brands chief executive Michael Daly said the launch into North America and Europe would remain small initially while it tested demand. All going well, he said Kathmandu planned to follow with retail store openings to complement its e-commerce strategy.

The company has its eyes set on large cities that appeal to its active outdoor consumer, locations such as Vancouver in Canada, Denver in America and Munich in Germany, for flagship retail locations.

"It is very much a soft launch [at this stage] focusing on 20 to 25 select influential outdoor accounts to test our concept and give us confidence for future expanded distribution. We're focusing on wholesale and online at the moment in Europe and Canada, and likewise when we launch in the US later this year," Daly told the Herald.

[Sideshow Bob]

I'm just waiting for the day they branch out to Nepal........Kathmandu in Kathmandu!! :p;)

[BlackPeter]

I'm just waiting for the day they branch out to Nepal........Kathmandu in Kathmandu!! :p;)

Good business over there, you recon?

[winner69]

NZ going to be even more of a non-event soon …..NZ sales now are only 12% of group sales

Been in decline for years …like in 2018 NZ sales were $143m and 4 years later 20% LESS at $114m

Got to think of KMD as a global company and don’t judge / assess on what you see in NZ

[percy]

[

Been in decline for years …like in 2018 NZ sales were $143m and 4 years later 20% LESS at $114m

Why.?
Business model not working here..
Will it work anywhere.?
Low online sales means they have been left behind in that very important channel.
That is where the good retailers are achieving growth and profitability.

[winner69]

[

Been in decline for years …like in 2018 NZ sales were $143m and 4 years later 20% LESS at $114m

Why.?
Business model not working here..
Will it work anywhere.?
Low online sales means they have been left behind in that very important channel.
That is where the good retailers are achieving growth and profitability.

Will it work anywhere asks percy?

Probably not

That's why they have gone the making of shoes and surf wear way

[percy]

Will it work anywhere asks percy?

Probably not

That's why they have gone the making of shoes and surf wear way

Shoes has been the ruin of many an enterprise.[as has surf wear].

[winner69]

Shoes has been the ruin of many an enterprise.[as has surf wear].

so true ....even Michael Hill found that out lol

[Rawz]

so true ....even Michael Hill found that out lol

That was 20 years ago. Wonder how KMD will be going in 20 years?

[percy]

That was 20 years ago. Wonder how KMD will be going in 20 years?

First of all you have to ask yourself whether you think they will still be in business or not in 20 years time.

[Habits]

Sp having a little uptick/rebound right now before proceeding to below psychological level $1. Sell now if you haven't already. Not downramping, just stating an opinion

[BlackPeter]

Sp having a little uptick/rebound right now before proceeding to below psychological level $1. Sell now if you haven't already. Not downramping, just stating an opinion

Hmm - looks like Abigale didn't get your memo:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/399606/380019.pdf

Question is - does she as a director know more or less about the company than an anonymous poster?

So difficult ...

[winner69]

Hmm - looks like Abigale didn't get your memo:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/399606/380019.pdf

Question is - does she as a director know more or less about the company than an anonymous poster?

So difficult ...

Averaging down after she bought at $1.57 a year ago - average price now $1.31 .... now $36k under water

She seems to be following what Liz Coutts does - poor Liz keeps buying Oceania shares and is best part of 1/4 million bucks under water

I suppose both are very astute and must have inside info (faith and hope) so no worries

[BlackPeter]

Averaging down after she bought at $1.57 a year ago - average price now $1.31 .... now $36k under water

She seems to be following what Liz Coutts does - poor Liz keeps buying Oceania shares and is best part of 1/4 million bucks under water

I suppose both are very astute and must have inside info (faith and hope) so no worries

I guess this is the problem with directors - as none of us does, they don't know the future either.

The only thing they might know more about than us is the present situation of their company and how it is positioned.

Anyway - director buying is normally a good sign unless you are shorter :p ;

[winner69]

I guess this is the problem with directors - as none of us does, they don't know the future either.

The only thing they might know more about than us is the present situation of their company and how it is positioned.

Anyway - director buying is normally a good sign unless you are shorter :p ;

Hey BP, another Director has bought more shares --- double good sign today ... exciting

Probably Chairman David sent the word out 'Our share price is really languishing, it is your duty to buy some more shares to demonstrate all is fine and the future is good. The market loves seeing director's confidence being backed up by cash '

[winner69]

It’s all on

Kathmandu announces new global expansion at Paris Fashion Week

Outdoor clothing retailer Kathmandu went to the biggest fashion event of the year to release its latest clothing range and announce a new global expansion into the UK, Europe and North America.

The outdoor apparel and gear brand partnered with the internationally renowned French retailer Leclaireur, based in Paris, to debut its autumn and winter 2022 collection.

Kathmandu’s global chief customer officer Eva Barrett said the collaboration with Leclaireur heralded the start of an exciting period for Kathmandu.


https://businessdesk.co.nz/article/retail/kathmandu-announces-new-global-expansion-at-paris-fashion-week

[BlackPeter]

Hey BP, another Director has bought more shares --- double good sign today ... exciting

Probably Chairman David sent the word out 'Our share price is really languishing, it is your duty to buy some more shares to demonstrate all is fine and the future is good. The market loves seeing director's confidence being backed up by cash '

And the directors just don't stop buying ;) - here is the third director in a row adding around 50k .... and still more exciting - for Philip it is already the second dip (he initially bought already 200k):

https://announcements.nzx.com/detail/400213

Must be well above one years worth of director fees ... do they know something the market doesn't?

[Recaster]

Bit of a look at this stock:

https://recastinvestor.substack.com/p/update-kmd-brands-kmdnzx-kmdasx

[BlackPeter]

Bit of a look at this stock:

https://recastinvestor.substack.com/p/update-kmd-brands-kmdnzx-kmdasx

Mmh - well ...

I think your recasting method is interesting and certainly might give others another tool how to analyse companies. Good source for ideas.

I think as well that you do highlight some valid points, however without painting or putting them into the big picture. This is likely to mislead anybody who is just relying on this analysis.

Example: It is correct that dividend was this year higher than earnings, however their average annual earnings is significantly higher than their dividend, and at this stage there are strong indications that 2022 was an unusually bad year.

Example: Yes, "Kathmandu CEO" resigned and has not yet been replaced. What you forget to mention is that he was only the Brand CEO without meaningful competences and reporting into the Group CEO, who has not changed and is currently doing as well the Brand CEO role. No big deal.

Example: You mention the low performance of OBOZ without even mentioning the reason. Their factory is in Vietnam, and had been shut down last FY for several months due to local Covid restrictions. Difficult to spin money when you are not allowed to run your factory. However - there are good reasons to assume that last year was a one off and indications from Q4 are that demand and production are humming.

Example: You didn't even mention that directors are holding significant share parcels and that they topped up recently in a meaningful way.

Ah yes - and you make it sound like changing the auditor is a bad thing. It is one of the NZSA (NZ Shareholders Association) recommendations that companies change their auditors at least once every (I think) 7 years. This avoids auditors and companies getting too cosy with each other and it avoids assumptions on the side of the auditors. Great that Kathmandu is doing that ... and beating them up for changing their auditors is clearly inappropriate.

In summary - I think your method is adding value, however to produce reports which matter you would need to look as well beyond the last two years in the books, but analyse longer term trends as well as try to understand and convey the context of the company you are analysing.

Anyway - just my 2 cents worth :) ;

[BlackPeter]

Anybody else noticed the recent Share price move, or did you all take KMD out of your portfolios and watchlists after the recent fashionable doom and gloom period?

SP moved above MA100 (the pink line below) and so far holding. Sure - early signs, but certainly worthwhile to watch. I like the green shoots coming out in spring :) ;

14284

Discl: holding;

[Biscuit]

Anybody else noticed the recent Share price move, or did you all take KMD out of your portfolios and watchlists after the recent fashionable doom and gloom period?

SP moved above MA100 (the pink line below) and so far holding. Sure - early signs, but certainly worthwhile to watch. I like the green shoots coming out in spring :) ;

14284

Discl: holding;

I just started buying in. Must be great minds thinking alike, or maybe just coincidence.

[winner69]

Deserves a big rave - today's announcement

Q1 FY23 underlying operating profit has improved by nearly $30m year-on-year

All back to normal

A broker had a $1.75 target not long ago --- share price heading back that way ..... middle of next year

[Bjauck]

O
Anybody else noticed the recent Share price move, or did you all take KMD out of your portfolios and watchlists after the recent fashionable doom and gloom period?

SP moved above MA100 (the pink line below) and so far holding. Sure - early signs, but certainly worthwhile to watch. I like the green shoots coming out in spring :) ;

14284

Discl: holding;
I bought a small holding (my minimum holding purchase) at the end of September. It was a gut purchase without much financial analysis. I had a good experience with buying a wrong size waterproof jacket. The online purchase process and return was a breeze, fast and efficient. Out of my 15 holdings, KMD has been my best performer since.

[BlackPeter]

Deserves a big rave - today's announcement

Q1 FY23 underlying operating profit has improved by nearly $30m year-on-year

All back to normal

A broker had a $1.75 target not long ago --- share price heading back that way ..... middle of next year

Didn't some of the directors back up the truck and buying more shares over the recent months?

Sometimes it appears to be useful to pay attention when directors are buying.

I did :) ... good buying in the low naughties ...

[winner69]

Like this bit in the press -


In a report by Forsyth Barr analysts today about fellow retailer KMD Brands, the investment bank said the company had undergone a “transformation from a single-brand retailer to a global brand owner”. “While macroeconomic headwinds are clearly present, KMD should be in a better position to face these challenges than at any other point in its history,” analysts Margaret Bei and Andy Bowley said

One day the market will eventually recognise this

[winner69]

KMD share price still flirting with $1

Nobody seems to see any good in KMD - they all can't be right

Even WHS seems to be doing better

But if you were SailorRob you'd be rejoicing if share price went below a buck .... and hoping for 50 cents

Even at today's price must be the 'cheapest' stock on the NZX - and a global business at that

[winner69]

I apparently need to be gloomy about KMD prospects and share price more often

Always gets the share price moving up

Didn’t a guru analyst have a $1.75 target on this once

Later in the year maybe

[Rawz]

Trading on a P/E of 20. How is it cheap?

Maybe SRob will get his 50 cents

[Recaster]

Trading on a P/E of 20. How is it cheap?

Maybe SRob will get his 50 cents

Based on historical or forecast earnings? Market seems to price on forecasts.

[winner69]

PE of 8 to 9 on forecast 23 earnings …..going to be good year as the world opens up for global brands

[Rawz]

Ill stick to the NZXs leading international retailer- MHJ. Trades on a similar PE of 8 to 9 (historical). Great div, buying back shares, has a 20%+ ROE. Its a proven performer with exceptional management.

KMD a bit all over the place. Financials ho-hum and always a CEO of the group or one of the brands leaving

The NZXs 'cheapest' stock might just get cheaper yet :eek2:

[winner69]

Alan Gray still sees value

Much respected value investor …sees a bargain when they come up

KMD on verge of a big run I reckon

[Paint it Black]

Agree the MACD momentum is sharply positive.

[Rawz]

was reading back through some posts late last year Nov/Dec and the SP SMASHED through the 100day ma.

what happened?? Looks like its back below it now

[Perky]

was reading back through some posts late last year Nov/Dec and the SP SMASHED through the 100day ma.

what happened?? Looks like its back below it now

wet holiday weather..campers evacuated to pubs, cafes and restaurants spending instead.
Camp grounds empty, music festivals cancelled
kmd holders probably suffering short term premature jacket elation sales?

[winner69]

wet holiday weather..campers evacuated to pubs, cafes and restaurants spending instead.
Camp grounds empty, music festivals cancelled
kmd holders probably suffering short term premature jacket elation sales?

NZ only a small part of KMD sales …..not even material in big picture

[Perky]

Yes, Ageee..your right again winner. It was meant to be a light hearted joke.

What has happened? KMD seems favoured by quite a few…maybe needs a sales update to get some camping butane to like a fire �� into the share price?

[winner69]

Macpac reported H1 sales to December were 55% up on pcp

Hope KMD done better than this in Aust and NZ

That be good

[Rawz]

$1 a bit of a magnet for KMD SP.

When is this big run kicking off? i love a good train ride.

Trading update on Monday maybe?

[Sideshow Bob]

Here is your update Rawz.........looks pretty good

https://www.nzx.com/announcements/406617

MD Brands Limited (ASX/NZX: KMD, “KMD” or the “Company”) is pleased to provide the following trading update for the half year ended 31 January 2023 (“1H FY23”).
• Sales momentum has continued in Q2, resulting in record first half sales

• Group total sales for 1H FY23 (unaudited) are expected to be approximately $546 million, an increase of +34% above 1H FY22, with particularly positive trading in Australia.

o Kathmandu sales recovery continues, with total sales +51% above 1H FY22, reflecting a return of travel and tourist-related spend

o Oboz first half sales have rebounded from COVID-related supply constraints last year, growing +124%

o Rip Curl total sales have grown +18%, with strong growth in direct-to-consumer sales, while maintaining wholesale sales levels following strong growth last year

• Group gross margin remains resilient overall, with improved gross margin for the Kathmandu brand

• Underlying 1H FY23 EBITDA(1) is expected to be approximately $45 million, cycling $10.2 million EBITDA in 1H FY22, which included $5.1 million of one-off COVID assistance

Inventory levels remain elevated, reflecting the decision to temporarily build stock positions to mitigate supply challenges and to support Oboz forward orderbook growth. Pleasingly, Kathmandu inventory is approximately $24 million lower than FY22, and the Group’s inventory balance is expected to normalise during the second half as purchase orders align to improved shipping timeframes.

The Group continues to benefit from a return to travel and international tourism through January, with Kathmandu sales strengthening +52% and Rip Curl continuing its growth trajectory at +19% for the month.

The Company intends to release its results for the 6 months ended 31 January 2023 on Wednesday, 22 March 2023, with a briefing session for investors and analysts to be held at 8:30am AEDT / 10:30am NZDT.

[Rawz]

is it good?

it looks good. but SP only up 2% so now im not sure?

[winner69]

is it good?

it looks good. but SP only up 2% so now im not sure?

Share price heading to that analyst target of $1.50 …..and that’ll be upgraded soon methinks

[percy]

is it good?

it looks good. but SP only up 2% so now im not sure?

• Sales momentum has continued in Q2, resulting in record first half sales
• Group total sales for 1H FY23 (unaudited) are expected to be approximately $546 million, an increase of +34% above 1H FY22, with particularly positive trading in Australia.
o Kathmandu sales recovery continues, with total sales +51% above 1H FY22, reflecting a return of travel and tourist-related spend
o Oboz first half sales have rebounded from COVID-related supply constraints last year, growing +124%
o Rip Curl total sales have grown +18%, with strong growth in direct-to-consumer sales, while maintaining wholesale sales levels following strong growth last year
• Group gross margin remains resilient overall, with improved gross margin for the Kathmandu brand
• Underlying 1H FY23 EBITDA(1) is expected to be approximately $45 million, cycling $10.2 million EBITDA in 1H FY22, which included $5.1 million of one-off COVID assistance

Looked good to me.
I tried to buy some at $1.09 limit.
Do not know if I bought any or not, as I have not received a contract note as yet.

[Rawz]

Share price heading to that analyst target of $1.50 …..and that’ll be upgraded soon methinks
Come on Winner you can ramp it more than that.

You have been saying for a long time now that this is the cheapest stock on the NZX. You deserve to pat yourself on the back and tell us how this is an amazing update

[Rawz]

Come on SP... this reminds me of the MHJ updates in 2021 when the numbers were so big that it was like the market didnt quite believe in it. Like if its too good to be true it probably is....

Percy- late last week i had a limit order at $1.04. didnt fill. then changed it to $1.05 yesterday. didnt fill. shame on me for trying to be cheap and save a cent or two. This morning i bought some at $1.10..............

[percy]

Come on SP... this reminds me of the MHJ updates in 2021 when the numbers were so big that it was like the market didnt quite believe in it. Like if its too good to be true it probably is....

Percy- late last week i had a limit order at $1.04. didnt fill. then changed it to $1.05 yesterday. didnt fill. shame on me for trying to be cheap and save a cent or two. This morning i bought some at $1.10..............

Just received the contract note from Craigs.My order was filled at $1.09.
KMD was not even on my watch list.
Had read up on them awhile ago when Blackpeter bought them.Thought they were a bit risky at the time,but he has proved to be right.
Did not buy too many.

[Rawz]

Just received the contract note from Craigs.My order was filled at $1.09.
KMD was not even on my watch list.
Had read up on them awhile ago when Blackpeter bought them.Thought they were a bit risky at the time,but he has proved to be right.
Did not buy too many.

Nice one!

Looks like sales have continued its momentum in the new year with Jan sales up 52% for Kathmandu and Rip Curl +19%. Both just ahead of the huge growth for the entire 1H.

Would of liked some commentary on the trading outlook thou?

[winner69]

You'd think that the KMD share price would follow the sales growth eh

quite impressive - even if from acquisitions but then they've suffered from covid stuff as well

I'd be in more if Captain Kirk left .... been there too long and a hindrance now

[percy]

You'd think that the KMD share price would follow the sales growth eh

quite impressive - even if from acquisitions but then they've suffered from covid stuff as well

I'd be in more if Captain Kirk left .... been there too long and a hindrance now

Solomon Lew,Tim Glasson,Rod Duke.??
Stay on Captain.

[BlackPeter]

is it good?

it looks good. but SP only up 2% so now im not sure?

You need to learn to think for yourself :p ;

[Rawz]

You need to learn to think for yourself :p ;

Markets confuse me, BP. They are so irrational.

Hey BP, do you know on the internet if you post the wrong answer people will be quicker to correct you with the right answer.. when compared to asking for the right answer straight up..

Think about that ;)

[winner69]

Solomon Lew,Tim Glasson,Rod Duke.??
Stay on Captain.

Captain Kirk no Solomon, Tim or Rod

Solomon, Tim and Rod are real retailers .... retail in their blood as they say

Dave no retailer ..... or baker when it comes down to it

[Rawz]

Me oh my.. SP only up 2% what the heck!!

BP, what’s going on? :)

[BlackPeter]

Me oh my.. SP only up 2% what the heck!!

BP, what’s going on? :)

Might be just another buying opportunity knocking :) ?

An opportunistic last trade? - VWAP was higher ... and it looks like today might start higher as well.

Markets (particularly the NZX) can be so unbelievable slow ... many investors still wait for their brokers to process the announcements and to receive an updated recommendation by snail mail. Don't forget as well that NZ Post is these days somewhat impaired, i.e. it might take days or even weeks for everybody to receive the update.

Anyway - amazing volume for KMD ... and still holding at MA200 ...

[Rawz]

ACC sold $1m worth at $1.11. Way to put the handbrake on

https://www.nzx.com/announcements/406748

[percy]

From 7 December 2022 to 14 February 2023, ACC had the following aggregated on-market
transactions in KMD Brands Ltd:
• Sales of 936,942 shares for consideration of NZD $1,049,375.04
• Purchases of 344,070 shares for consideration of NZD $357,216.80

[Rawz]

ACC trade:
buy 344k worth of shares at $1.038= $357k
sell 344k worth of shares at $1.12 = $385k

Profit= $28k

hardly seems worth it? or is this okay for the insto's?

[percy]

ACC trade:
buy 344k worth of shares at $1.038= $357k
sell 344k worth of shares at $1.12 = $385k

Profit= $28k

hardly seems worth it? or is this okay for the insto's?

You have to wonder.

[BlackPeter]

ACC trade:
buy 344k worth of shares at $1.038= $357k
sell 344k worth of shares at $1.12 = $385k

Profit= $28k

hardly seems worth it? or is this okay for the insto's?

Probably my fault. I went yesterday with a shoulder injury to the physio. I suppose they now need to liquidate their assets to pay for the physio :)

[percy]

From Craigs' research today.
Recovery on track.
overweight.
Price target-12 mth.....$1.44

ps Just doubled my holding at $1.10.

[winner69]

I see KMD joined the sub $1 club today

Short stay I reckon …so CHEAP CHEAP at the mo

Markets gone silly

[Louloubell]

Bit of a worry indeed with the result due this week.
Having said this, I also saw this decline wuh Fonterra shares prior to their announcement and they have now risen around 17%
Time will tell, but they seem incredibly cheap atm.
Am a long term holder of KMD and FSF.

[winner69]

Bit of a worry indeed with the result due this week.
Having said this, I also saw this decline wuh Fonterra shares prior to their announcement and they have now risen around 17%
Time will tell, but they seem incredibly cheap atm.
Am a long term holder of KMD and FSF.

You’d have to think KMD result pretty good as they said sales were up 34% on last year

Was positive for share price at the time but been downhill since eh

[Rawz]

KMD just one of many attractively priced stocks right now. What a delight

[winner69]

KMD just one of many attractively priced stocks right now. What a delight

Everybody, especially guru broker analysts, are saying everything is back on track

That's good

[mike2020]

Low yield for a retailer. Is it expected to improve rapidly? Would it be better to gain exposure through BGP?

I have always thought it did better when we had a lot of overseas visitors. Could provide some upside.

[percy]

Low yield for a retailer. Is it expected to improve rapidly? Would it be better to gain exposure through BGP?

I have always thought it did better when we had a lot of overseas visitors. Could provide some upside.

Correct.From their 14th Feb update.
Kathmandu sales recovery continues, with total sales +51% above 1H FY22, reflecting a
return of travel and tourist-related spend

[Rawz]

Winner will go mad saying it again so ill do it this time lol. KMD is a global brand and NZ sales account for only 12-14% something like that of total sales ($1b)

[winner69]

Winner will go mad saying it again so ill do it this time lol. KMD is a global brand and NZ sales account for only 12-14% something like that of total sales ($1b)

That's right Rawz - NZ essentially a non event as the Group goes

Hallenstein Bros sell about the same as Kathmandu in NZ - as does Glassons ..... and Michael Hill sells even more

[winner69]

Wonder if Rod Duke does more than just keep a watching brief on his $88m investment in Kathmandu. KMD with all its acquisition probably too big for him to do too much with it anyway.

The $88m now worth $51m and even with about $30m of divies and a bit from not taking up all his rights he still under water.

During a chat with Rod a few years ago he did tell me the divie was better than having the money in the bank ....but then the shares were more than a buck back then

Average buy was $1.83 so possibly waiting for the glory days to come again before he gets rid of them

Not like Rod being on the losing end of things eh

[Waltzing]

just wait a few decades and how old is RIP CURL and still going strong..

winner() we havt even left the COVID QE hang over and remember it took 5 years to climb out of the GFC...

lets face it it all been one perfect storm after another.

Not expecting this stock to start to hit its stride for a few years yet...

They havnt even let anyone back into the country to work on tourism have they?

or apparently they dont want tourism back...

Yep dont see this doing much till the world goes cabin crazy and starts to travel again big .. Another 5 years?

[mike2020]

Winner will go mad saying it again so ill do it this time lol. KMD is a global brand and NZ sales account for only 12-14% something like that of total sales ($1b)

Now, neither of us said NZ was the only country getting overseas visitors :)

[winner69]

Statutory NPAT of $14.0 million; Underlying NPAT1 of $16.5 million

One thing I noticed

Group EBIT (underlying) $29.3m …RipCurl EBIT $28.8m

Shoes and Kathmandu don’t contribute much do they

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/408724/391122.pdf

[BlackPeter]

Statutory NPAT of $14.0 million; Underlying NPAT1 of $16.5 million

One thing I noticed

Group EBIT (underlying) $29.3m …RipCurl EBIT $28.8m

Shoes and Kathmandu don’t contribute much do they

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/408724/391122.pdf

Well, yes - Ripcurl is a ripper!

Oboz much smaller (as well in revenue, so they might be forgiven) ... and Kathmandu at least turned positive again. Wondering, whether they are taking some of the costs for the others (not sure, how they split the costs to run the shops?).

Anyway - overall direction looks good and outlook sounds positive, though not very specific ...

[Sideshow Bob]

Back of $1 this morning. No worries.....

[Waltzing]

always buying rip curl surf tops... who doesnt...

still dont see it back to 160 till KMD starts making some more money as travellers return...

China travellers are not back yet in any numbers and with CW2 (cold war 1 and a half) will they let them through the great wall or filter them...

KMD does best when travel is FULL ON...as they say in white water kayaking..

[percy]

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/zYAtsvHUNkzTUQDgRIuOkA/2T0a5L8luuDCkDAKsv2ghw

[Rawz]

already 2m shares traded at $1.025?

[winner69]

already 2m shares traded at $1.025?

Today will be big day

Big punters took it all in over night and will be jumping over each other to BUY BUY

Day after announcement often start of the run when thing s are good

[DarkHorse]

"With a healthy balance sheet, and expectations for strong cash flow
generation in the second half, we are in an excellent position to execute onour growth strategy through expanding our global footprint, investing in
digital platforms, leveraging operational excellence, and leading the
industry through sustainability and innovation."

Just starting to look into KMD.
Of course this type of global expansion can either greatly boost or greatly reduce profitability, depending on how well it is executed.

Any thoughts on the management and how skilled they are at such execution?

[winner69]

Today will be big day

Big punters took it all in over night and will be jumping over each other to BUY BUY

Day after announcement often start of the run when thing s are good

Maybe Alan Gray taking those 2 million shares this morning

However rest of market don’t seem too impressed with all the good things they put in their preso …maybe thinking just a lot of buzz words with no real substance …not quite a load of ****e but close to it

That rave should get share price moving up!

Overall market looking happier last hour or so

[Waltzing]

lets wait and see winner() + grinner() as market news often causes the SHAZ to buy and then ...

while this is an international stock now like HLG that is what is saving its SP from a downward trend...

https://www.nzherald.co.nz/business/rbnz-we-need-to-accept-were-poorer/ZWTC5TIBEBCZNOBGH5ZQLUOOGU/

Most of the NZX might be something to avoid... these guys arnt blaming themselves.... Its all your fault people...

[winner69]

Much respected and successful value investor Alan Gray still buying at bargain prices

Probably can’t believe their good fortune

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/409824/392483.pdf

[Rawz]

One day KMD and MHJ will be $1.50 per share.. both great international retailers and both good buying close to a buck

[Sideshow Bob]

Pretty good figures.....

https://www.nzx.com/announcements/411610 (https://www.nzx.com/announcements/411610)

KMD Brands continues strong sales growth in Q3

KMD Brands Limited (ASX/NZX: KMD, “KMD” or the “Company”) is pleased to provide the following trading update for the quarter ending 30 April 2023 (Q3 FY23):

• Sales growth across all brands continued in Q3 FY23
• Gross margin remained resilient through the quarter
• The key fourth quarter (“Q4”) winter trading period for Kathmandu, and Northern Hemisphere summer for Rip Curl and Oboz remains

TOTAL SALES GROWTH

Q3 FY23 3 months Feb 23 to Apr 23

Rip Curl 7.9%
Kathmandu 11.3%
Oboz 120.3%
Group 15.6%

YTD FY23 9 months Aug 22 to Apr 23

Rip Curl 15.0%
Kathmandu 36.0%
Oboz 122.7%
Group 27.7%

Commenting on the Q3 trading update, Group CEO & Managing Director Michael Daly said:
“We are pleased to report that Rip Curl, Kathmandu, and Oboz have achieved another quarter of year-on-year sales growth. We now begin our key Kathmandu winter and Northern Hemisphere summer trading periods. The Group is well positioned to benefit from the return of international travel and tourism and is continuing to invest in the long-term international expansion of our brands.”
This announcement has been authorised for release to NZX / ASX by the Board of Directors of KMD Brands Limited.
- ENDS -

[Sideshow Bob]

Must say I'm not normally a customer of Kathmandu - but got given a "friends & family voucher" from someone who works there.

Was recently going through Ashburton (not the branch where my friend works at) and used the voucher. The staff there were outstanding, super friendly and made for a great experience. Big ups to them. :)

[BlackPeter]

Pretty good figures.....

https://www.nzx.com/announcements/411610 (https://www.nzx.com/announcements/411610)

KMD Brands continues strong sales growth in Q3

KMD Brands Limited (ASX/NZX: KMD, “KMD” or the “Company”) is pleased to provide the following trading update for the quarter ending 30 April 2023 (Q3 FY23):

• Sales growth across all brands continued in Q3 FY23
• Gross margin remained resilient through the quarter
• The key fourth quarter (“Q4”) winter trading period for Kathmandu, and Northern Hemisphere summer for Rip Curl and Oboz remains

TOTAL SALES GROWTH

Q3 FY23 3 months Feb 23 to Apr 23

Rip Curl 7.9%
Kathmandu 11.3%
Oboz 120.3%
Group 15.6%

YTD FY23 9 months Aug 22 to Apr 23

Rip Curl 15.0%
Kathmandu 36.0%
Oboz 122.7%
Group 27.7%

Commenting on the Q3 trading update, Group CEO & Managing Director Michael Daly said:
“We are pleased to report that Rip Curl, Kathmandu, and Oboz have achieved another quarter of year-on-year sales growth. We now begin our key Kathmandu winter and Northern Hemisphere summer trading periods. The Group is well positioned to benefit from the return of international travel and tourism and is continuing to invest in the long-term international expansion of our brands.”
This announcement has been authorised for release to NZX / ASX by the Board of Directors of KMD Brands Limited.
- ENDS -

True ... and I suppose you are not just referring to the figures of the surfers in the investor presentation :) ;

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/411610/394560.pdf

Some pretty cool pictures, even for people not interested in KMD's business, which is doing quite fine as well.

[Rawz]

Nice update. My TA knowledge is limited but the chart is looking promising.

[Muse]

True ... and I suppose you are not just referring to the figures of the surfers in the investor presentation :) ;

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/411610/394560.pdf

Some pretty cool pictures, even for people not interested in KMD's business, which is doing quite fine as well.

Preso not long enough for me

(at first glance looks like a lot of good stuff)

[percy]

Preso not long enough for me

(at first glance looks like a lot of good stuff)

Too long for me..lol.
However a good road map,with defined objectives.
A happy holder.

[Rawz]

This is about to rocket

Well done holders

[Sideshow Bob]

Alan Gray Group buying a few more....

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/412916/396330.pdf

[winner69]

Alan Gray Group buying a few more....

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/412916/396330.pdf

They love these cheap stocks on NZX eh .... more Sky City the other day

[Rawz]

What does the TA gurus think of the chart? My knowledge is limited but from what I can see it’s trading in a range of sorts and all it needs is a positive announcement to break out? Or the reverse I guess

[Sideshow Bob]

They love these cheap stocks on NZX eh .... more Sky City the other day

Dual listed - they might be buying cheap stocks on the ASX!! :rolleyes:

[winner69]

F23 going to be record breaking year ….that’s pretty good

Should give share price a much needed boost …even if only driven by relief things aren’t bad

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/414604/398360.pdf

[BlackPeter]

F23 going to be record breaking year ….that’s pretty good

Should give share price a much needed boost …even if only driven by relief things aren’t bad

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/414604/398360.pdf

Markets are funny, aren't they? But yes, they probably noticed that while correct about the record, it still was some sort of downgrade of revenue (compared to the analyst expectations), and "underlying" EBITDA is a bit difficult to assess given that they don't tell us what's above the water :):

Still - they say margins are in line with last year, which means at least no deterioration on the earning side. Or does it? They said gross margins resilient, didn't they :confused:?

[Rawz]

F23 going to be record breaking year ….that’s pretty good

Should give share price a much needed boost …even if only driven by relief things aren’t bad

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/414604/398360.pdf

when you say boost.. you mean thrusters in reverse type boost?

SP down 5.8%

[Rawz]

Retail.. all retail struggling

So KMD will do over a billion in sales and make maybe $39m. whats the point?

[BlackPeter]

Retail.. all retail struggling

So KMD will do over a billion in sales and make maybe $39m. whats the point?

OK - admittedly the announcement is somewhat fuzzy, and yes, your numbers look right.

But first lets check with last years report to put it into perspective, shall we?

Last years Gross margin was 58.9%. This is not bad, and they say that the margin this year will be in line with that.

Their revenue last year was $980m, this year they predict $1100m. More than 10% growth, not too bad either.

Underlying EBITDA last year was $92m. This year they expect it in the vicinity of $105m ... $110m (i.e. growing inline or even a bit faster than revenue, which is good).

Last years EBITDA resulted in an underlying NPAT of $36.2m. Admittedly - we don't know about the extras, but for starters I would expect their NPAT this year slightly above $40m.

So yes, Net margins are thin ... but then, they are in retail - and at the end, what is the problem?

From an investors perspective - you can currently buy a 6 cent dividend (which they can afford to pay) for less than $1. Not too bad, isn't it? And at the end of the day, doesn't it make sense to buy retail shares while they are down (and still pay you a good dividend) instead of buying them when everybody is pushing them up?

[Fortunecookie]

You can see the damage to retail stocks a mile away.

[Rawz]

OK - admittedly the announcement is somewhat fuzzy, and yes, your numbers look right.

But first lets check with last years report to put it into perspective, shall we?

Last years Gross margin was 58.9%. This is not bad, and they say that the margin this year will be in line with that.

Their revenue last year was $980m, this year they predict $1100m. More than 10% growth, not too bad either.

Underlying EBITDA last year was $92m. This year they expect it in the vicinity of $105m ... $110m (i.e. growing inline or even a bit faster than revenue, which is good).

Last years EBITDA resulted in an underlying NPAT of $36.2m. Admittedly - we don't know about the extras, but for starters I would expect their NPAT this year slightly above $40m.

So yes, Net margins are thin ... but then, they are in retail - and at the end, what is the problem?

From an investors perspective - you can currently buy a 6 cent dividend (which they can afford to pay) for less than $1. Not too bad, isn't it? And at the end of the day, doesn't it make sense to buy retail shares while they are down (and still pay you a good dividend) instead of buying them when everybody is pushing them up?

Yes agree. Not too bad but i dont think KMD is cheap and i think it was priced to do a little better. I was expecting higher underlying ebitda.

So now looking at the chart it was looking okay for most of this year in what i can tell. Trading in a holding pattern waiting to see results. I am worried now its going to get into a downtrend with SP below 50 below 100 below 200.. and soon will be priced like the rest of the retailers i.e. p/e at or under 10 and double digit div yield.

I have sold this morning.

[BlackPeter]

Yes agree. Not too bad but i dont think KMD is cheap and i think it was priced to do a little better. I was expecting higher underlying ebitda.

So now looking at the chart it was looking okay for most of this year in what i can tell. Trading in a holding pattern waiting to see results. I am worried now its going to get into a downtrend with SP below 50 below 100 below 200.. and soon will be priced like the rest of the retailers i.e. p/e at or under 10 and double digit div yield.

I have sold this morning.

Fair enough. But just for the record ... average PE (10 years) is at 97 cents already at 7, and forward PE (whatever the estimates are worth) is 9.1 - i.e. we might be already there.

I put in an order this morning (but - admittedly - nobody so far took up my offer ;) ); Never mind, I can wait ...

[Rawz]

Fair enough. But just for the record ... average PE (10 years) is at 97 cents already at 7, and forward PE (whatever the estimates are worth) is 9.1 - i.e. we might be already there.

I put in an order this morning (but - admittedly - nobody so far took up my offer ;) ); Never mind, I can wait ...

those forward PE estimates and now worth not a lot :)

if they do $40m npat its a P/E of 17..

[winner69]

KMD half year preso they showed Rolling 12 months sales $1,150m and ebitda $127m

So 2nd half Ebitda about $20m less than last year

Rough numbers for H223 -

Sales $552m ,,,DOWN $22m or 4% on pcp
Ebitda $60m ……DOWN $22m or 25% on pcp

Jeez ..if this trend carries through into F24 no wonder punters jumping ship and share price collapsing

[winner69]

KMD Q3 sales up 16% which was pretty good …and they were pretty excited about that

H2 sales flat at best

Must have been a torrid last quarter …….double digit decline

[winner69]

Jeez …nearly 4 million shares dumped at 92.5

Maybe NZ Super …..only bought heaps lately but

[bulltrap]

Jeez …nearly 4 million shares dumped at 92.5

Maybe NZ Super …..only bought heaps lately but

One fund's dump is another fund's scoop.

[BlackPeter]

those forward PE estimates and now worth not a lot :)

if they do $40m npat its a P/E of 17..

They are worth as much as any other prediction, no matter how negative you are.

[winner69]

Just prior to announcing the Rip Curl acquisition I June 2019 KMDs market cap was about $680m. FY19 sales were $546m and NPAT was $58m

Since then (4 years) sales have doubled to $1.1 billion but NPAT is going to be about $45m

And today KMDs market cap is still about $680m ….even though they’ve raised the best part of $400m

Something not quite right eh

But some might say it just shows the huge potential and possible big share price gains once KMD sort their **** out and maybe get lucky

[alokdhir]

Just prior to announcing the Rip Curl acquisition I June 2019 KMDs market cap was about $680m. FY19 sales were $546m and NPAT was $58m

Since then (4 years) sales have doubled to $1.1 billion but NPAT is going to be about $45m

And today KMDs market cap is still about $680m ….even though they’ve raised the best part of $400m

Something not quite right eh

But some might say it just shows the huge potential and possible big share price gains once KMD sort their **** out and maybe get lucky

This shows that retail business is a tough nut to crack ....better to avoid ...it's always too volatile for any long termer's comfort ...traders paradise

[winner69]

Respected value investment manager Alan Gray still thinks Kathmandu pretty good

Another 1% of company at A$0.91

Doesn’t pick losers

[Waltzing]

Should be some rip curl wet suit sales coming up..

[winner69]

Harbour / Jarden losing the faith …..selling down

[percy]

Harbour / Jarden losing the faith …..selling down

Summary for Allan Gray Group
For this disclosure,—
(a) total number held in class: 73,653,753
(b) total in class: 711,347,722
(c) total percentage held in class: 10.354%
For last disclosure,—
(a) total number held in class: 66,084,548
(b) total in class: 711,347,722
(c) total percentage held in class: 9.290%

[X-men]

Allan Gray also bought **** load of SKC at higher price off course.

SkC is now trading below thier purchase price. their holding is underwater big time

I guess Allan Gray is astute investor n see things that we don't see

[Maxtrade]

What level do folk here think demand will kick back in on the Buy side. Probably not long before sharsies and Jarden reinforce its previous 'opportunity for entry and top up' level again now touching into the 0.89 range. Will likely see a push pretty quickly again back north in the $1 plus as soon as momentum resumes. Pretty low SP currently, will be pleanty of traders who are sitting waiting to see the transition and jump on the bounce I'm sure. Just how much more has it got left in it to decline though, must be getting pretty close.


Summary for Allan Gray Group
For this disclosure,—
(a) total number held in class: 73,653,753
(b) total in class: 711,347,722
(c) total percentage held in class: 10.354%
For last disclosure,—
(a) total number held in class: 66,084,548
(b) total in class: 711,347,722
(c) total percentage held in class: 9.290%

[Recaster]

Recast operating cash flow is a problem in FY22 and HY23. Financing cash flow holds lease liability payments in presented accounts consistent with accounting rules but this distorts the real operating cash flow. Dividends high.

[Sideshow Bob]

Al still buying

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/416487/400519.pdf

[winner69]

Al still buying

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/416487/400519.pdf

Once you get in so deep you may as well continue to average down

[BlackPeter]

Al still buying

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/416487/400519.pdf

Just some data points: 10 year backward PE is 6.4 (admittedly with a negative earnings CAGR - they used to have some rough patches over this time). Analyst "Consensus" for KMD brands is $1.18, Shareclarity DCF value is $1.77 ... and I need to buy after my holidays a new pair of hiking boots.

For what its worth ... I put the KMD share in my books at a fair value of roughly $1.60. Who knows - maybe Al has came to a similar result. Anyway, he seems to think as well that they are at current SP good buying.

Obviously - all future looking data points are dependant on assumptions - and we all know that nobody is able to predict the future :) - but yes, I do need the hiking boots, that's a fact ; I even left my old pair overseas - not really worth anymore to clean them for biosecurity inspection ... and I won't consider the general economic situation before buying a new pair;

[mike2020]

You will wait for a sale right? They have them often enough. I went in last week at The Base and there wasn't a lot of choice to be had in the boots.

[Louloubell]

I can tell you that I'm a hiker and swear by the Obiz shoes. Virtually indestructible

[winner69]

I can tell you that I'm a hiker and swear by the Obiz shoes. Virtually indestructible

Agree about Oboz boots I got years ago been worn every day ….up hill and down dale ……and still going strong

[mike2020]

Yip has taken me two years to wear a pair out. Just seemed there wasn't a lot of stock on hand that day but they were doing clearance on some ugly stuff.

[Rawz]

https://www.nzx.com/announcements/416915

KMD is so cheap that Super fund is topping up

[Maxtrade]

Indeed, seems very cheap, almost back at 0.80 level when all analysts were recommending to jump on board and buy. Good top up level opportunity due to the instability in the general market?



https://www.nzx.com/announcements/416915

KMD is so cheap that Super fund is topping up

[winner69]

Jeez, KMd shares down to 77cents

At least above the 50 cents from the capital raise a couple of years ago ….but those who fronted up with $2.55 for the Rip Curl buy and still holding must be a bit depressed

Anybody buying?

[percy]

Jeez, KMd shares down to 77cents

At least above the 50 cents from the capital raise a couple of years ago ….but those who fronted up with $2.55 for the Rip Curl buy and still holding must be a bit depressed

Anybody buying?

Not buying,but holding,until their result is out on 21st of this month.
Depends on their outlook as to what I will do.

[Rawz]

It’s actually pretty cheap now.

Might rebuy the ones I sold after that last update

[moka]

Summary for Allan Gray Group
For this disclosure,—
(a) total number held in class: 73,653,753
(b) total in class: 711,347,722
(c) total percentage held in class: 10.354%
For last disclosure,—
(a) total number held in class: 66,084,548
(b) total in class: 711,347,722
(c) total percentage held in class: 9.290%I remember the name from Allan Gray from several years ago because they buy distressed stocks.
If I owned something and Allan Gray was buying in my thought was “I stuffed up again, bought high again and will sell low.“
Allan Gray buy distressed stocks.

From their website “The company believes in taking a different approach from the market consensus and investing in undervalued companies that have the potential to deliver long-term returns.” Note that they say long term returns i.e. years not months. They are a good indicator of a distressed stock. They are very successful however and Wikipedia says the return on investment from Allan Gray and Orbis since its founding is comparable in success to Warren Buffett's firm Berkshire Hathaway. If you have a long-term investing horizon it is worth noting where they are buying.

Allan Gray Australia's investment philosophy is similar to that of Orbis Investments, which was also founded by Dr. Allan Gray.
Overall, Allan Gray Australia's investment philosophy is centered around taking a contrarian approach, applying it consistently, and investing for the long term.

[winner69]

Wonder what Rod Duke thinks of Kathmandu these days ….probably saying I have to hang in there and hope hope it’ll come right

[winner69]

Rods $87m investment now worth $37m ……..Rod wouldn’t like that methinks

[kiwical]

Kathmandu have revamped their rewards program for customers. It seems very generous on a quick look. Heck you can get reward points just by ticking boxes to say you've looked at a view or gone for a beach stroll. They also have free shipping for everyone. I always raise an eyebrow about overly generous retail reward programs. Does it mean they are doing so well they can afford to sweeten things up? Or is it a sign of a company struggling for sales?

[BlackPeter]

Kathmandu have revamped their rewards program for customers. It seems very generous on a quick look. Heck you can get reward points just by ticking boxes to say you've looked at a view or gone for a beach stroll. They also have free shipping for everyone. I always raise an eyebrow about overly generous retail reward programs. Does it mean they are doing so well they can afford to sweeten things up? Or is it a sign of a company struggling for sales?

... might be just a reflection on their undiscounted sales margins (like Briscoes). As a customer I only buy from them on specials (and thre are plenty), but as a shareholder I can live with their strategy as long as it works.

[Rawz]

I reckon $39m-$40m profit which puts them on a 13.5-14 P/E

[winner69]

I reckon $39m-$40m profit which puts them on a 13.5-14 P/E

Bit expensive then

And acquisition execution risk

[moka]

I can’t remember which stock/s I held that Allan Gray bought into. But I know the name is associated with deep pain for me. A name I will always remember, like some of the names of the Tainted Directors thread, started in 22-11-2009. Wynyard anyone? Some interesting comments in the thread about finance companies for those who have forgotten or were not investing back then.

https://www.sharetrader.co.nz/showthread.php?7372-Tainted-Directors/page7
(https://www.sharetrader.co.nz/showthread.php?7372-Tainted-Directors/page7)
And in todays news;
" A former National Cabinet minister is to be charged for misleading investors during his directorship of failed finance company Lombard Finance.
The Securities Commission announced today that it would launch civil proceedings against four Lombard directors, Sir Douglas Graham, Michael Reeves, William Jeffries and Lawrence Bryant.
Mr Graham was Minister of Justice and Attorney-General for a National Party-led Government during the 1990s."

[Rawz]

I can’t remember which stock/s I held that Allan Gray bought into. But I know the name is associated with deep pain for me. A name I will always remember, like some of the names of the Tainted Directors thread, started in 22-11-2009. Wynyard anyone? Some interesting comments in the thread about finance companies for those who have forgotten or were not investing back then.

https://www.sharetrader.co.nz/showthread.php?7372-Tainted-Directors/page7
(https://www.sharetrader.co.nz/showthread.php?7372-Tainted-Directors/page7)
And in todays news;
" A former National Cabinet minister is to be charged for misleading investors during his directorship of failed finance company Lombard Finance.
The Securities Commission announced today that it would launch civil proceedings against four Lombard directors, Sir Douglas Graham, Michael Reeves, William Jeffries and Lawrence Bryant.
Mr Graham was Minister of Justice and Attorney-General for a National Party-led Government during the 1990s."

Allan Gray the company is associated with deep pain for you? Like they screwed you somehow? I dont get it

[moka]

Allan Gray the company is associated with deep pain for you? Like they screwed you somehow? I dont get itGood question Rawz. And very relevant to share trading.

This is from the book The Disciplined Trader by Mark Douglas.

“Associations seem to be a natural characteristic of the way in which we think. That is, our brains are wired in such a way as to link similar forms of environmental information together automatically. We do this basically in two ways. First there is a natural propensity to label people and objects based on some prominent characteristic and then categorize them into associative groups. After we categorize the groups by sex, hair, colour, skin colour profession, economic status, educational background, and so on, we then associate whatever experience we have about the group with everyone and everything that has those same characteristics. For example, if we have a painful experience with a person who has a skin colour different from that of our own we will automatically associate every one with that skin colour with the qualities of that one experience.

The second way we associate is by linking extraneous sensory information with some event. We will automatically associate what we are smelling, tasting, hearing or seeing along with the quality of energy of the primary experience. For example, a child getting spanked will associate all the other environmental information that his senses are inadvertently picking up with the pain he is feeling from the spanking. So, if there was some song playing on the radio or a distinctive odour in the air at the same time he was experiencing pain, he will associate the song or the odour with the pain.

In future when he hears that song or smells that particular odour, they will automatically cause him to experience the negative energy connected with the spanking. Even years later if he hears that song it will carry him back to that time, changing his experience from happiness to anger, sadness, or guilt.”

[Rawz]

Good question Rawz. And very relevant to share trading.

This is from the book The Disciplined Trader by Mark Douglas.

“Associations seem to be a natural characteristic of the way in which we think. That is, our brains are wired in such a way as to link similar forms of environmental information together automatically. We do this basically in two ways. First there is a natural propensity to label people and objects based on some prominent characteristic and then categorize them into associative groups. After we categorize the groups by sex, hair, colour, skin colour profession, economic status, educational background, and so on, we then associate whatever experience we have about the group with everyone and everything that has those same characteristics. For example, if we have a painful experience with a person who has a skin colour different from that of our own we will automatically associate every one with that skin colour with the qualities of that one experience.

The second way we associate is by linking extraneous sensory information with some event. We will automatically associate what we are smelling, tasting, hearing or seeing along with the quality of energy of the primary experience. For example, a child getting spanked will associate all the other environmental information that his senses are inadvertently picking up with the pain he is feeling from the spanking. So, if there was some song playing on the radio or a distinctive odour in the air at the same time he was experiencing pain, he will associate the song or the odour with the pain.

In future when he hears that song or smells that particular odour, they will automatically cause him to experience the negative energy connected with the spanking. Even years later if he hears that song it will carry him back to that time, changing his experience from happiness to anger, sadness, or guilt.”

I understand. Would be like if a company called 'Tequila' started investing in KMD. Would put me off KMD big time :scared:

[mike2020]

150k giveaway. I'm in.

[winner69]

I reckon $39m-$40m profit which puts them on a 13.5-14 P/E

If you take the average of the two npat numbers about spot on rawz

NPAT $36.6m but in KMD lingo that’s really $43.3m

And a really really positive commentary so no worries

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/418516/403312.pdf

[winner69]

Bit of slow start to new year with August sales down 6% on last year ….surprised they didn’t say that August last year was a huge month so not really comparable

[Rawz]

Sell $120m more stuff. Make same amount as FY22

[percy]

I was surprised by the low 1.54 stock turns.
Was expecting a bit better result.In the meantime I will continue to hold,as their outlook is positive,as is their cash flow from operations.
Net cash inflow from operating activities $147,588,000 up from $81,808,000..
FY24 OUTLOOK
• Group sales for Aug 23 -6.4% below last year.
• Kathmandu Q4 sales trend continues, but consistent with pre-pandemic sales levels for this time of year.
• Rip Curl and Oboz have seen good momentum in direct-to-consumer sales.
• Strategic plans remain unchanged, with key executive appointments (Kathmandu CEO, Chief Information Officer, and Chief Digital Officer) to drive strategy
execution.
• Ongoing new store opportunities. Minimum of 8 committed new stores in the first half.
• Margin underpinned by excess supplier capacity in market, reducing international freight cost, channel mix to DTC, offsetting any short-term FX impacts.
• Continued progress towards our 15% underlying EBITDA margin target, with right-sized cost base in place.
• Ongoing reduction of working capital to 18% of sales target to drive strong cash flow generation.
• Despite the challenging consumer sentiment, we are well positioned with tailwinds from continued return to travel, positive impact from the launch of innovative
products and the outdoor lifestyle trend post-pandemic.

[BlackPeter]

If you take the average of the two npat numbers about spot on rawz

NPAT $36.6m but in KMD lingo that’s really $43.3m

And a really really positive commentary so no worries

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KMD/418516/403312.pdf

Yep, certainly a positive rave in these distressed times ... great commentary, and good to see that they managed to achieve the expected revenue growth and sort of maintained their margins!

While a 6 cent divvie (for the full year) is nice for holders, its a bit worrying to see that their EPS (roughly 5 cents, depending on how one counts the shares) is below that. Hope they plan to fund this with an amazing summer sales season rather than putting the additional divvie on their (so far good looking) balance sheet.

Sounds however, they look with faith into the future ...

Dividend trap or deep value game?

[winner69]

Sell $120m more stuff. Make same amount as FY22


Hey rawz …..don’t spoil the fun ….it was a great year

[winner69]

Rent reviews saw an overall reduction over 63 sites …..that’s good

[winner69]

F23 npat if 37m or 43m still a lot less than the 51m and 58m reported in 2018 and 2019 …and they even made 42m in 2014

Maybe a sign of what’s possible in coming years …….you’d have to say acquisitions haven’t added anything to bottom line yet

[winner69]

…….

Dividend trap or deep value game?

Surely a deep value play

[Rawz]

ROE= 4.3%
FCF Yield= 4.2%

I dare not calc the ROIC because i assume its value destruction

[BlackPeter]

ROE= 4.3%
FCF Yield= 4.2%

I dare not calc the ROIC because i assume its value destruction

Interesting ... my spreadsheet came up with a ROE of 5.7%. While still not flash ... which input do you use to arrive at 4.3%? Did you take out the gains through currency movements?

[Rawz]

Interesting ... my spreadsheet came up with a ROE of 5.7%. While still not flash ... which input do you use to arrive at 4.3%? Did you take out the gains through currency movements?
Yes used npat of $36m not the comprehensive income of $48m

[Rawz]

BP they generated $24.6m in free cash flow and then pay out $43.3m in dividends. Wow they must be confident in the future

[winner69]

I get ROE of 4.3%

[Rawz]

Market screener has profit for FY24 at $53m. Trading already behind last year so somehow they will still improve by 47%???? How?

I dont believe it

[BlackPeter]

I get ROE of 4.3%

It depends on your choice of "return".

I consider gains through hedging as "return" as well, same as I would deduct them from the return if they are losses.

[winner69]

ROE= 4.3%
FCF Yield= 4.2%

I dare not calc the ROIC because i assume its value destruction

I reckon ROIC about 4.9%

Jeez the debt leverage doesn’t even increase ROE

PWC say KMD cost of capital is 12.7% ….yes so heaps of value destruction

But no worries …..be all different in a few years time

I take it you not buying KMD

[BlackPeter]

Market screener has profit for FY24 at $53m. Trading already behind last year so somehow they will still improve by 47%???? How?

I dont believe it

Based on past observations are financial forecasts always uncorrelated to what is going to happen - i.e. it makes sense not to "believe" the forecasts collected by market screener (or anybody else) if you want to use them as model for what will happen.

If you use them however as just one possible scenario of what potentially could happen, than I found them as good as any other forecast.

Sometimes I find it useful to just develop a potential scenario which could make a particular forecast happen.

I could see a number of scenarios allowing KMD to improve its profits this FY. Whether they will happen, is another question - but then, I didn't predict in 2019 neither FPH's nor ATM's amazing fortunes (and later downturn), nor did I predict in 2021 the outbreak of Putins latest war and the related company profits or lack thereof.

So, just imagine the world returning to their senses and local as well as international tourism booming. I am sure, KMD would benefit from that.

Imagine a world improving their environmental thinking and moving to buy better stuff (and less often) instead of buying every season cheap junk. KMD would benefit from that.

Imagine a world where more people want to rediscover the outdoors and need the right gear to do that. KMD would benefit from that.

Could all happen, couldn't it? Maybe it depends just on whether you are an optimist or a pessimist?

[winner69]

BP they generated $24.6m in free cash flow and then pay out $43.3m in dividends. Wow they must be confident in the future


Funding headroom of $200m helps make that decision …..cool eh

[Azz]

Based on past observations are financial forecasts always uncorrelated to what is going to happen - i.e. it makes sense not to "believe" the forecasts collected by market screener (or anybody else) if you want to use them as model for what will happen.

If you use them however as just one possible scenario of what potentially could happen, than I found them as good as any other forecast.

Sometimes I find it useful to just develop a potential scenario which could make a particular forecast happen.

I could see a number of scenarios allowing KMD to improve its profits this FY. Whether they will happen, is another question - but then, I didn't predict in 2019 neither FPH's nor ATM's amazing fortunes (and later downturn), nor did I predict in 2021 the outbreak of Putins latest war and the related company profits or lack thereof.

So, just imagine the world returning to their senses and local as well as international tourism booming. I am sure, KMD would benefit from that.

Imagine a world improving their environmental thinking and moving to buy better stuff (and less often) instead of buying every season cheap junk. KMD would benefit from that.

Imagine a world where more people want to rediscover the outdoors and need the right gear to do that. KMD would benefit from that.

Could all happen, couldn't it? Maybe it depends just on whether you are an optimist or a pessimist?

Imagine a world where Temu exists. And 'made in China' apparel costs even less than it used to.

[winner69]

Something weird with their numbers

H223 NPAT (adjusted) was $26.8m which is 40% less than $44.9m in pcp H222

Looking at rolling annual total (2 halves) at Jan 2023 it was $61.4m …now $43.3m

Seems profits are in decline

[Azz]

BlackPeter, are you banking on some form of climate event to turn this dog of a stock into a winner, much like your views on kiwifruit?

[winner69]

Muse pointed out HLG 2nd half profit was down 18% and commented it was a year of two halves

Seems the case for KMD as well so no worries

[Rawz]

KMD did increase operating cashflows by 81% and reduced inventory by $5m even though they sold $100m more stuff so thats good.

Probably best to wait for half year because the signs are already there that its going to be a tough half. so with the SP already in a downtrend + high potential for poor 1st half FY24 why buy now?


In the short term, our brands face challenges with geopolitical uncertainty, economic volatility, market competition, supply chain disruptions, and cost-of-living impacts on consumer spending. Our competitors are pricing aggressively to shift high levels of inventory and challenging our market share.

One thing to watch will be the wholesale kathmandu sales in Europe and North America. If that booms it could be boomtime for the SP... Current is $2m odd or something negligible like that

[winner69]

Market doesn’t seem too impressed with the numbers and the rave …..share price down sub 80 cents again

[winner69]

KMD paid the best part of $100m for Oboz …..when they bought it ebitda was US$4.6m heading to US$7.1m

I see Oboz ebitda this year was NZ$7.9m …..hmmmm


Been tough times of late but you’d have to hope like anything this chart looks better over the next few years

[Azz]

This stock has got 59c written all over it.

[winner69]

I’m still trying hard to find reasons why to like KMD

But this chart showing Kathmandu brand (ie no Rip Curl etc) performance over the years is a pretty sad one ….even sadder than the Oboz one I posted yesterday.

Don’t think many retailers in ANZ are worse off post covid than before……possibly reflects management performance.

To me it also shows there’s a huge gap between KMD rave and reality ……so I’ve told myself to take the raves as just that and don’t believe much or any of it

[winner69]

Forbar keeping the faith in KMD and keeping OUTPERFORM … “We maintain a positive medium-term view of KMD's growth potential, and although the near-term backdrop remains challenging, we think this is mostly priced in.”

And Craig’s say KMD is their “favoured retail/consumer stock” and continues to see value at current levels.

So all OK on that front

[percy]

Craigs have eps rising from 6.09 in 2023 to 6.7 in 2024 an increase of 10% then increasing 44% to 9.67 in 2025.
Market Screener,................5....................7... .................................40%.............. ........42.85% to 10 ............,

[Rawz]

Did Forbar and Craigs get FY23 right?

[winner69]

One thing Kathmandu do well is the size of their Annual Report

It’s 208 pages ….must be some record for the NZX ..if not the world

Must have a lot to rave about

[BlackPeter]

Did Forbar and Craigs get FY23 right?

Good question, and I don't track individual analysts - but I do track consensus forecasts.

The last forecast I had for KMD from early July (i.e. prior to the FY results) was Rev $1165m (which was pretty much spot on) and EPS 8 cents (which turned into 5 cents).

So, yes and no ... they got the important bit wrong. On the other hand - nobody can predict the future, and this includes analysts :) - the best they can do is outline one possible option how things might develop in future. If they are good, than at least they get it in average more often right than wrong.

[percy]

Forecast future earnings is near impossible to get 100% right.
However getting a good understanding of a company,and doing a lot of research, including reading brokers' reports ,you sometimes do get it right.
When you do the profits are worth the effort.

[winner69]

Our mate Phil Bowman bought some more shares (for himself and his investment company)

Averaging down nicely ….now the average is $1.21

But whst he’s down the gurgler by is only petty cash for our Phil

Where’s he living these days …last heard off back in the UK

[Rawz]

On the PnL the depreciation and amort expense is $123,713k and says to refer to section3.2-3.4 for the explanation.
However when I look at that section it has depreciation for the year of $22,824k (page 74) and amortisation of $14,132k (page 75).

So it doesn't add to $123m.. what am i missing??

Edit add: thought it was extremely high considering investing activities total $35.9m

[Fortunecookie]

On the PnL the depreciation and amort expense is $123,713k and says to refer to section3.2-3.4 for the explanation.
However when I look at that section it has depreciation for the year of $22,824k (page 74) and amortisation of $14,132k (page 75).

So it doesn't add to $123m.. what am i missing??

Edit add: thought it was extremely high considering investing activities total $35.9m

Lease depreciation?
3.4.1 Right-of-use assets

[Rawz]

Lease depreciation?
3.4.1 Right-of-use assets

Oh yeah thanks. I’ve been caught out by this so many times now

[Fortunecookie]

Oh yeah thanks. I’ve been caught out by this so many times now

It is certainly a good area to look at to see if amortization is material- non cash impact to the NP.

[Rawz]

If you look at FY20 cashflows you can see how one could get excited about KMD. They generated $73m. So if one day soon they got back to this sort of cash cow level at todays market cap of $611m it looks pretty good. $73m/$611m= 12%. Double digit cashflow yield good aye

This year they generated $24.6m fcf. Not very good. Paid out a dividend of $43m. Used debt to pay it.
One could think this big divvy is a good sign that management are confident the cashflows will one day get back up towards $70m level. Otherwise why payout so much cash?

SP has bounced nicely from the low of $0.77 back to $0.86 now.

I still think half year has been flagged as poor so this SP jump will be short lived imo and no need to rush in to buy.

[winner69]

If you look at FY20 cashflows you can see how one could get excited about KMD. They generated $73m. So if one day soon they got back to this sort of cash cow level at todays market cap of $611m it looks pretty good. $73m/$611m= 12%. Double digit cashflow yield good aye

This year they generated $24.6m fcf. Not very good. Paid out a dividend of $43m. Used debt to pay it.
One could think this big divvy is a good sign that management are confident the cashflows will one day get back up towards $70m level. Otherwise why payout so much cash?

SP has bounced nicely from the low of $0.77 back to $0.86 now.

I still think half year has been flagged as poor so this SP jump will be short lived imo and no need to rush in to buy.

Cash flows weren’t too bad before FY20 either rawz …before acquisitions

Seems they’ve been unable to turn these acquisitions into decent cash flows …..selling heaps more and having less cash left over at end of day

Ok, events have to some extent been against them but even so financial performance is a bit a worry. Does those charts I posted re Oboz and Kathmandu worry you?

I reckon jury still out on whether KMD management can get things back to where they should me …until they do share price will disappoint

[Rawz]

Cash flows weren’t too bad before FY20 either rawz …before acquisitions

Seems they’ve been unable to turn these acquisitions into decent cash flows …..selling heaps more and having less cash left over at end of day

Ok, events have to some extent been against them but even so financial performance is a bit a worry. Does those charts I posted re Oboz and Kathmandu worry you?

I reckon jury still out on whether KMD management can get things back to where they should me …until they do share price will disappoint

Yes they make for poor viewing. No growth.

A no growth P/E is about 8? Percy said the other day Craigs FY25 eps estimate is 9.67. Put the no growth P/E multiple of 8 on that and you get 9.67*8= 77 cents share price. thats what the low was last week or so. thats interesting

[winner69]

Yes they make for poor viewing. No growth.

A no growth P/E is about 8? Percy said the other day Craigs FY25 eps estimate is 9.67. Put the no growth P/E multiple of 8 on that and you get 9.67*8= 77 cents share price. thats what the low was last week or so. thats interesting

Not that’s interesting …….it’s that’s spooky eh

[Azz]

Not that’s interesting …….it’s that’s spooky eh

Market efficiency! :-)

[percy]

Craigs have eps rising from 6.09 in 2023 to 6.7 in 2024 an increase of 10% then increasing 44% to 9.67 in 2025.
Market Screener,................5....................7... .................................40%.............. ........42.85% to 10 ............,

There is very strong eps growth.

[Sideshow Bob]

I'd just like to see Rod on the board, even though only 6.75%.

Or is that putting the wolf into the chicken coop??

[winner69]

I'd just like to see Rod on the board, even though only 6.75%.

Or is that putting the wolf into the chicken coop??

Think you summed it up nicely

Rod did say he was ‘happy’ with how they ran the place but with current profits not much different from shortly after he offered to take them offer he might feel differently

Probably he’s holding on for share price to improve to get out … so like everybody hoping they can do better than Craig’s forecast

[winner69]

I still can’t get over that KMD made about about the same this year as they did in 2017 even though since then they spent about $100m for Oboz and $368m for Rip Curl …..nearly half a biliion for no gain.

Could say huge potential if they get the acquisitions to work and deliver what they indicated at the time ….. a value investors dream stock as long as they believe in hope

[winner69]

Chair David or is it Captain Kirk buys some more shares

Always a good sign when insiders buy

[BlackPeter]

I still can’t get over that KMD made about about the same this year as they did in 2017 even though since then they spent about $100m for Oboz and $368m for Rip Curl …..nearly half a biliion for no gain.

Could say huge potential if they get the acquisitions to work and deliver what they indicated at the time ….. a value investors dream stock as long as they believe in hope

No company can operate in a vacuum - and maybe the markets and the industry got ruffled somewhat since 2017, didn't they? Wasn't there some sort of pandemic with significant impact on factory operations (OBOZ), shop opening hours (lock downs) and tourism?

OK - I agree that some rugtrader (HLG) did somewhat better during this time, but its a different market - and many others did bite the dust.

Lets see, where they manage to go after Covid with tourism on again.

[Rawz]

Insiders buying in. thats good

[winner69]

No company can operate in a vacuum - and maybe the markets and the industry got ruffled somewhat since 2017, didn't they? Wasn't there some sort of pandemic with significant impact on factory operations (OBOZ), shop opening hours (lock downs) and tourism?

OK - I agree that some rugtrader (HLG) did somewhat better during this time, but its a different market - and many others did bite the dust.

Lets see, where they manage to go after Covid with tourism on again.

Yep a lot has gone on over the last few years but many retailers seem to have come out of the troubled times better off …..Briscoes a great example

When KMD sales have increased from $446m in 2017 to $1.109m this year and profits about the same something is wrong

But that’s the past eh …and looking forward analysts etc are forecast profits over next 3 years so things are looking good ……share price might even double in that time …..hope springs eternal

Still can’t bring myself to buy some ….but that’s good for you guys eh as you reap the rewards while I miss out

[winner69]

Interesting chart on marketscreener

One day KMD won’t ‘force’ them to revise their eps forecasts downwards ….a few upgrades be good

[BlackPeter]

Yep a lot has gone on over the last few years but many retailers seem to have come out of the troubled times better off …..Briscoes a great example

When KMD sales have increased from $446m in 2017 to $1.109m this year and profits about the same something is wrong

But that’s the past eh …and looking forward analysts etc are forecast profits over next 3 years so things are looking good ……share price might even double in that time …..hope springs eternal

Still can’t bring myself to buy some ….but that’s good for you guys eh as you reap the rewards while I miss out

True :) ;

And yes, some other retailers did better. Don't think however that neither Briscoes nor Hallensteins have any material exposure to tourism. Kathmandu does.

Can you think about any other retailer with significant exposure to tourism, who did better than Kathmandu?

But absolutely - never buy a stock you are not sure about ... I wouldn't buy all the stocks you tend to rave about either :) ;

[winner69]

Super Retail reports a slow start to their new year with Macpac sales having a 7 per cent fall in total sales over last 16 weeks

[bull....]

Super Retail reports a slow start to their new year with Macpac sales having a 7 per cent fall in total sales over last 16 weeks

imagine what it would have been without all the immigration

[Bjauck]

imagine what it would have been without all the immigration The current NZ economy snd government is propped up on immigration. One day we will wake up to another overcrowded and polluted* country.

* it is not as though it is pristine with the current population.

[winner69]

Directors given hard time at ASM




Disgruntled KMD shareholders quiz directors at AGM

https://businessdesk.co.nz/article/markets/disgruntled-kmd-shareholders-quiz-directors-at-agm

[winner69]

Not a good day on bourse for KMD today … down 4 cents to 77 on solid volume

No doubt Alan Gray happy picking up more cheap ones

[Rawz]

I wonder how their Christmas trading is going?

This was their last outlook:

In the short term, our brands face challenges with geopolitical uncertainty, economic volatility, market competition, supply chain disruptions, and cost-of-living impacts on consumer spending. Our competitors are pricing aggressively to shift high levels of inventory and challenging our market share.