Kathmandu just posted a horrible half-year result

(Photo: Getty Images)

Adventure clothing retailer Kathmandu has posted a half year loss of $NZ1.8 million after a promotional campaign failed to produce sales over Christmas and January.

The result, on a 7% increase in sales to $NZD179.4 million, was 115.8% down on the same half in 2014 when Kathmandu posted a $NZ11.4 million profit.

Acting Chief Executive Mark Todd said: “Our Christmas sale and trading through January did not produce the sales we expected.”

Contributing factors included: promotional campaigns which didn’t drive the expected foot traffic; active wear; wovens and midweight fleece didn’t hit the mark with buyers; and a generally weaker discretionary spend environment in Australia.

Online sales growth was strong in all countries, with overall growth of 33% led by an uplift of more than 90% in the UK. But online sales are only 5.8% of total sales.

Kathmandu opened eight new permanent stores in the first half of 2015, all in Australia.

Todd said the full year result was highly dependent on the Easter and Winter sales.

Historically more than 60% of Kathmandu’s sales are made in Easter and Winter, as customers stock up on supplies for the winter adventure season. Last year more than 70% of full year profit was earned in the second half of the year.

An unchanged interim dividend of NZ 3 cents per share will be paid.

Investors have been selling down Kathmandu.

Its shares fell 8% to $1.44 today.

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