Kathmandu jumps on strong sales
Kathmandu jumps on strong sales

Kathmandu shares were higher after the company said same store sales rose 2.1 per cent in the 16 weeks to November 21 from a year ago, which the outdoor clothing and equipment retailer says is reasonable in a still difficult trading environment.

The company, which listed in New Zealand in November 2009, told shareholders at its annual meeting that it had sales of $51.6 million in the period, which was 9.3 per cent up on the corresponding period last year.

The rise in same store sales compared with growth of 19.2 per cent in the previous year.

Chief executive Peter Halkett said growth in the product range would continue to be a key growth driver.

"Continuous innovation of new product ranges with a focus on product design, technology and quality will be key to our ongoing success. We have targeted a 30 per cent range growth over the next three years," he said.

He said retail conditions remained challenging in Australia, New Zealand and the United Kingdom.

There was no significant variation in same stores sales performance between the countries during the 16 week period.

"Given trading conditions, our sales performance in the first 16 weeks of the financial year is reasonable. Sales momentum has been steady and we have maintained gross margins," Mr Halkett said.

Kathmandu reported earnings before interest and tax grew by 12.4 per cent to $NZ47.9 million in the year to July 31 after eliminating the one-off costs associated with the IPO.

Chairman James Strong said the company anticipated continuing to adopt a dividend payout ratio of around 55 per cent of tax paid profit in the medium term.

The economic environment would continue to adversely affect overall consumer spending in at least the short term.

"Despite these circumstances and the disappointing current share price, Kathmandu's continuing market leadership, brand positioning and value proposition, which is underpinned by its vertical integrated business model, will continue to provide strategic competitive advantage and resilience to deal with any extended market downturn," he said.

The company successfully launched online selling in October 2009 and trading had been above expectations in both New Zealand and Australia.

ASX-listed Kathmandu shares were up 5.5 cents, or 4.62 per cent, to $1.245 at 10.40am.

The West Australian

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