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Thread: Kathmandu IPO

  1. #1216
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    Quote Originally Posted by Beagle View Post
    Sure is mate. Some of those jackets we saw at Queenstown were stupidly cheap at the mountain warehouse. https://www.mountainwarehouse.com/nz/
    Pleased to be out and shall retreat to my kennel and lick my wounds from this one.
    Thanks for the link mate, some really nice gear there at sharp prices, will be replacing my 5 yr old Kathmandu gear for some of this.

  2. #1217
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    Quote Originally Posted by winner69 View Post
    Lesson ..don’t believe all the hype in the media and these daily updates from Paymark. Makes good reading though and creates a bit of excitment eh
    No, a real miss, had heard retail was weak Nov/Dec however if you can't count on stats national wide from Paymark...

  3. #1218
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    Default What they said previously

    Sales for the 15 full weeks to 11 November 2018:
    o Kathmandu total sales growth +8.4% at constant exchange rates*1
    (excluding Oboz);
    o Kathmandu same store sales growth +6.3% at constant exchange rates;*1

    o Same store sales growth by country: Australia +7.1%, New Zealand
    +5.2%.

    OBOZ
    For the first quarter of FY2019:
    o Oboz sales NZD $15.7m at a gross margin of 39.8%;
    o Remain on track to achieve the US$7.1m EBITDA earn-out target for the
    2018 calendar year.

    Kathmandu's Chief Executive Office Xavier Simonet said "we have seen
    continuing demand for core Kathmandu products, following on from a successful
    winter last year. We are also pleased with the continuing strong performance
    of Oboz and integration into the Kathmandu Group."

    Mr Simonet added "we have achieved good sales growth leading into the key
    Christmas trading period, and we expect first half profit to be strongly
    above last year.
    However, as always our first half-year result is highly
    dependent on the success of our Summer Sale."
    Thoughts....If first half results are so heavily dependent on the summer sale I think Mr Simonet's comment is disappointing and unfortunate.
    Better to be more conservative with the language like some more seasoned retailers comments isn't it ! Something like this would seem to be more appropriate.
    "Sales for the first 15 weeks provide encouragement but its too early in the season to give any indication of profitability for the first half".
    No way HLG would have lead shareholders up the garden path like that is there...

    His credibility has taken a hit at least in my eye's. So...leading on from that I can't help wondering, when is the oboz acquisition going to be eps accretive or even profitable ?...couldn't really get any handle on that from the annual report or the annual meeting transcript ? This seed of doubt about how this was handled puts the lack of transparency regarding the earnings of the Oboz acquisition into question. On the face of it the gross profit margin of 39.8% is well below that for the rest of the company's products and on only $15.7m sales I wonder how they worked out the purchase price of $US60m base price plus up to another $US15m earn out ?
    This acquisition was stated to be expected to be mid single digit accretive to eps when the share placement was announced in March 2018 to fund it. One wonders why shareholders are not being told if this is profitable yet and if it is mid single digit earnings accretive to eps then why does it appear that eps growth is headed towards being negative ? Something doesn't seem to add up here ?

    Don't think I'll go barking up this tree again anytime soon. Once bitten, twice shy !
    Last edited by Beagle; 03-01-2019 at 12:49 PM.
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  4. #1219
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    Quote Originally Posted by forest View Post
    Partially offsetting lower than expected sales to date for 1H FY2019, is a c. 60 bps improvement in retail gross margins to c. 64%.

    I like this improvement in gross margins. Could have more influence on profit growth than the reduction in sales have on profit reduction.
    On last years financials a 0.6% points increase in margin improves GM by ~$3m

    On the other each 1% change in growth impacts GM by a bit more than $3m (+/-)

    Reckon that’s why they used the words ‘partially offsets’
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  5. #1220
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    Quote Originally Posted by winner69 View Post
    On last years financials a 0.6% points increase in margin improves GM by ~$3m

    On the other each 1% change in growth impacts GM by a bit more than $3m (+/-)

    Reckon that’s why they used the words ‘partially offsets’
    Thanks Winner, I should have spend a bit more time analysing the results. Very disappointing this announcement.

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    Quote Originally Posted by forest View Post
    Thanks Winner, I should have spend a bit more time analysing the results. Very disappointing this announcement.
    I think there was a bit left ‘unsaid’ in this announcement

    Late March announcement will be interesting ....hopefully things improve dramatically
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  7. #1222
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    Quote Originally Posted by winner69 View Post
    I think there was a bit left ‘unsaid’ in this announcement

    Late March announcement will be interesting ....hopefully things improve dramatically
    I can't see how that's going to happen. For the latest 7 weeks sales to have had such a dramatic effect on the first 15 weeks (more than double the period) the very latest trading performance must be extremely disappointing. That suggests to me that there's some big discounts coming in terms of very heavy summer discounting promotion activity coming which could impact margin.

    Balance reckons downgrades come in three's. So this one, (effectively a downgrade on an eps basis) another in late March when they announce the half year and another one before the annual result in due course. $2.00 is on the cards here I reckon, maybe even a bit lower.
    Last edited by Beagle; 03-01-2019 at 02:06 PM.
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  8. #1223
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    Jeez
    Quote Originally Posted by Beagle View Post
    I can't see how that's going to happen. For the latest 7 weeks sales to have had such a dramatic effect on the first 15 weeks (more than double the period) the very latest trading performance must be extremely disappointing. That suggests to me that there's some big discounts coming in terms of very heavy summer discounting promotion activity coming which could impact margin.

    Balance reckons downgrades come in three's. So this one, (effectively a downgrade on an eps basis) another in late March when they announce the half year and another one before the annual result in due course. $2.00 is on the cards here I reckon, maybe even a bit lower.
    Jeez $2 or less, that’s pretty low
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  9. #1224
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    Quote Originally Posted by winner69 View Post
    Jeez

    Jeez $2 or less, that’s pretty low
    I think its plainly obvious we're in a bear market now, (look what's happened to Apple sales, see CNBC.com if you want even more evidence) and KMD will be at best a zero growth eps company for the foreseeable future. People are going to pull their head in with consumer discretionary purchases, (this is not a consumer staple) so the clear risk to flat eps this year is to the downside going forward, if we're not already heading down now.
    Ben Graham's well respected valuation methodology was to apply a PE of 8.5 for a no growth company. If they can make 23 cps earnings this year 8.5 x 23 = $1.95.5
    If others want to pay more, good luck to them.

    The company dropped a really ugly and unexpected downgrade clanger on the market today so a 20-30% correction wouldn't surprise me in the slightest.

    There's a massive difference between a strong growth company and a no growth company as you know mate which is why I dropped this thing like a boiling hot potato this morning. When you make an investment mistake for whatever reason, yours's or the company's, in my experience its better to admit it, take the loss on the chin and move on.
    Last edited by Beagle; 03-01-2019 at 03:46 PM.
    No butts, hold no mutts, (unless they're the furry variety).

  10. #1225
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    Speaking from a customer's point of view. Recently I've been wanting to buy a bag and a few other items at Kathmandu. A few weeks ago in mid December, I saw on their website that sale ends on the 14th January 2019, so I decided to wait a wee bit into the new year before making any purchases.

    Is it possible that this lower than expected sales update for the Christmas/Boxing Day period be partly due to Kathmandu making the sale period somewhat extended? Had they made the sale strictly end on boxing day or before end of the year, that would have given customers (like myself) more urgency to rush out and buy everything before the sale was over, and that could have made the December sales figures look better.

  11. #1226
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    Possibly the worst December weather ever made kiwis not want to go on camp, hence buying less camping gears?

  12. #1227
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    Kathmandu sell twice as much in Oz than they do in NZ

    NZ sales been going nowhere for years. Last year they were down.

    Yesterday’s announcement said Oz sales slightly down. They won’t be repeating last years strong growth in OZ

    Oz the problem for F19 - not this impending recession in NZ
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  13. #1228
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    Market Value Added MVA is a measure that shows what the market per se thinks of a company. It is the company’s market cap less shareholder equity (the market value of shareholder equity). Positive MVA is good - adding value to equity and all that (rather than destroying value)

    KMD’s MVA at Jan18 was $158m (good).

    They acquired Oboz and raised $50m capital and the market loved that driving its MVA to an astounding $323m in Aug 18. Yes KMD’s market cap was $743m (up from $485m in Jan18)

    Today KMD’s market cap is $528m and it’s MVA has fallen to a mere $78m

    So since announcing the Oboz acquisition (and raising more capital) KMD’s MVA has fallen by about $80m (or cut it in half)

    Seems like the market per se thinks Oboz is a bit of dud and worse still still have lost confidence in Kathmandu and it’s ability to perform well in the future.
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  14. #1229
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    KMD say nz sales are down 2.4% so far this year

    Not unexpected so no surprise. Not really a reason to conclude NZ consumers have stopped spending and the country is heading into a recession.

    Not unexpected - just look at the chart below - Kathmandu in NZ not doing that well over the years eh ...and this year year looks like much of the same.
    Attached Images Attached Images
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  15. #1230
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    From above chart Kathmandu NZ sales up 1.4% since 2014 (cAGR +0.4% pa)

    Core Retail sales in NZ are up 24% in same period .....Clothing, footwear etc sector up 16%

    Sort of says Kathmandu in NZ are essentially losers .....fast sales in what has been pretty buoyant times.

    Makes you wonder eh.
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

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