Kathmandu sales have been hit by a strong US dollar

Brendon Thorne/Getty Images

Shares in Kathmandu fell after the adventure clothing retailer reported weak sales and a flat profit forecast.

A short time ago, they were down 4.2% to $1.695.

CEO Xavier Simonet says sales in the first 15 weeks of the financial year were impacted by a stronger US dollar.

Total sales were up 2.8%, but were down 0.6% after the impact of exchange rates.

“We have maintained our improved working capital position, with lower net debt and stock per store than the same time last year,” Simonet says.

“Through careful management of gross margins and operating expenditure we remain on track to match last year’s first half profit result despite pressure on sales growth.

“As always our first half-year result is highly dependent on the more significant Christmas trading period.”

In September the company posted a 64% rise in annual after tax profit to $NZ33.5 million ($A32.5 million). The result was on a 4% rise in sales to $NZ425.6 million ($A413 million) at its 162 stores, reflecting cost cutting and better margins.

The retailer in 2015 posted a 51.7% drop in profit to $NZ20.4 million ($A19.8 million) after a series of sales promotions which confused customers.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.