Kathmandu shares soar on increased profit guidance

Image: Supplied.

Shares in Kathmandu jumped after the adventure clothing retailer forecast a 60% to 70% rise in full year net profit.

A short time ago, the shares were more than 18% higher at $1.47.

In guidance released today, Kathmandu says it estimates that full year 2016 net profit after tax will be between $NZ32 million to $NZ35 million compared to $NZ20.4 million last year.

This is well ahead of previous guidance of $NZ30.2 million.

The company says year-to-date same store sales growth for the 47 weeks to June 26 is +2.6%.

“Despite the winter season starting late this year, product newness and careful management of promotional activity have resulted in a better than expected gross margin,” says CEO Xavier Simonet.

A substantial proportion of the year’s sales and earnings result are still dependent on trading in July, the final month of the company’s financial year.

Kathmandu is due to release its full year results in September.

The company posted a 51.7% drop in profit for 2015 to $NZ20.4 million after a fall in local sales, a rise in costs and a series of sales promotions which confused customers.

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