The company previously raised $180m in 2019 to buy Rip Curl and a further $207m during Covid in 2020.
KMD reported total group sales of $505.4m for the half-year, up 7.3% from $470.9m in the prior corresponding period.
The group’s earnings before interest, tax, depreciation and amortisation (ebitda) also lifted, up 20% from $52.7m to $63.3m.
However, it posted an operating loss of $1.7m with gross margin down 1.2% from 58.0% to 56.8%.
KMD Brands director Brent Scrimshaw said Rip Curl had navigated “more volatile” trading conditions.
The reported net loss of $13.1m was a 36.8% improvement on its previous first-half loss of $20.7m.
KMD Brands group chief executive Brent Scrimshaw said the group had accelerated the pace and quality of execution since launching its “Next Level” strategy.
“Strong early progress has been made against our key initiatives, giving us further conviction in our potential. We’re particularly encouraged by the improved performance of Kathmandu, which has delivered double-digit same-store sales growth for the first time in over two years,” Scrimshaw said.
“It’s also pleasing to see consumers responding positively to our accelerated product freshness, flow and assortment, along with a renewed focus on innovation.”
Brand breakdown
Kathmandu led the group sales momentum in the first half, with sales increasing by 12.3% from $156.8m to $176.1m.
Sales lifted both in Australia, up 10.2% year-on-year, and in New Zealand, up 8.9% year-on-year, with online sales in line with last year at $20.6m.
Same-store sales (including online) also lifted by 12.8% year-on-year, with the key Black Friday and Christmas trading periods cycling a good result last year.
However, gross margin for the brand fell by 1.5% of sales, with the group pointing to a focus on selling through aged inventory in the first quarter, while maintaining competitive promotional intensity through the second quarter.
Total inventory for the half ended $9.8m lower than last year, with underlying operating expenses reduced year-on-year following a strategic cost reset and ongoing cost discipline.
Kathmandu made an operating loss in the half of $10.2m, although it was a 53.9% improvement on its $22m loss in the prior corresponding period.
The group’s largest brand, Rip Curl, had its sales lift by 4.6%, up from $278.5m to $291.4m.
The group said the result was helped by the year-on-year movement in foreign exchange rates used to convert global sales to New Zealand dollar reporting currency. On a constant currency basis, Rip Curl sales were up 0.3%.
Wholesale sales increased by 9.8% year-on-year, supported by strong demand in Europe and North America.
Direct to consumer (DTC) sales increased by 1.9%, with strong sales for North America, offsetting a challenging market during the Southern Hemisphere peak summer period.
Online sales also lifted, up 6.7% to $22.5m, while DTC same-store sales grew by 1.5%.
However, gross margin for the brand decreased, down 1.2% due to elevated promotional activity.
As for footwear brand Oboz, it had total sales lift 6.5% from $35.6m to $38m, driven by wholesale sales increases of 7.5%.
Online sales for the brand increased by 0.9%, impacted by lower close-out inventory levels year-on-year.
The group plans to move Oboz’s website on to the group online trading platform, as the brand’s digital marketing is refined with new agency partners.
Unlike Kathmandu and Rip Curl, Oboz’s gross margin lifted over the half, up 0.2%.
KMD Brands chairman David Kirk has confirmed his intent to step down from his position in the coming months.
Outlook
In the group’s trading update for the first six weeks of the second half, DTC same-store sales (including online) for Kathmandu lifted by 11.1%, combined with gross margin improvement of 50 basis points.
The group said the momentum had continued for the brand as it heads into the key trading period of autumn and winter.
Sales for Rip Curl also grew during the period, lifting by 1.2% year-on-year. No update was given for the first six weeks of Oboz’ trading.
Wholesale order books for the second half are in line with last year for Rip Curl and Oboz, with the Europe and North American summer seasons to come.
Looking ahead, the group said it remains focused on delivering continued improvement compared with the prior year.
But in a well-telegraphed decision, KMD Brands chairman David Kirk has confirmed his intent to step down in the coming months.
Kirk said the group’s refreshed leadership team had delivered against its clear objectives over the last six months.
“After securing a short-term extension to our debt facilities in January 2026, it was important for our continued execution to strengthen our balance sheet, accelerate our path to our leverage target and secure a longer-term debt facility to support our ongoing transformation,” he said.
“With the balance sheet now strengthened through the debt refinancing and the launch of the equity raise, KMD Brands is well-positioned to continue executing its Next Level strategy.
“Having worked closely with the board and management through this critical phase, and been on the board for 13 years, I believe this is the right time to signal my intention to step down as chairman in the coming months.”
The KMD Brands board has commenced an orderly succession process, with more details likely to be shared at the group’s next annual meeting.
The board did not declare an interim dividend for the first half.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
Stay ahead with the latest market moves, corporate updates, and economic insights by subscribing to our Business newsletter – your essential weekly round-up of all the business news you need.