Shares in Kathmandu fell more than 24% to $1.42 after the adventure clothing retailer posted below expectations sales for the first half of the financial year.
Total sales are $179.2 million, an increase of 6.9%. However, same store sales growth was 2.8% for the 26 weeks to the January 25.
“This sales result was below expectations, and gross margins for the half year will be below the levels of the prior comparative period, particularly in Australia.”
The company expects a first half loss of between $1 million and $2 million compared to last year’s first half profit of $11.4 million.
Kathmandu’s acting Chief Executive Officer Mark Todd said the company’s trading performance during the key Christmas and January period was below expectations.
“Successful execution of our key sales promotions in Easter and Winter are core to our overall earnings performance for the full year,” Todd said.
Historically more than 60% of Kathmandu’s sales are made in Easter and Winter. Last year more than 70% of full year profit was earned in the second half of the year.