Half Year 2026 KMD Brands Ltd Earnings Call Transcript
Key Points
- KMD Brands Ltd (KTHUF) has returned to growth under new leadership, with strong early progress against strategic initiatives in the first half of FY26.
- The company announced a fully underwritten capital raise of $65 million and refinancing of its debt facility, aimed at strengthening the balance sheet.
- All three brands within the group, including Kathmandu, Rip Curl, and Oboz, have shown sales growth, with Kathmandu achieving strong direct-to-consumer sales growth in both Australia and New Zealand.
- The company has achieved significant cost savings, delivering an additional $2.5 million above the $25 million target for FY26.
- KMD Brands Ltd (KTHUF) has improved its inventory position and mix, optimizing working capital and reducing aged inventory levels.
- The group's statutory net loss after tax was $13.1 million, with an underlying net loss of $11.5 million, although this was an improvement from the previous year.
- Gross margin decreased by 120 basis points to 56.8% in the first half, reflecting a challenging promotional marketplace.
- Rip Curl's sales run rate has declined over the last three quarters, with challenges in the Australian market and a need to reset the brand strategy.
- The company faces a volatile macroeconomic environment, with increased financial pressure on consumers and potential cost inflations, such as freight costs.
- KMD Brands Ltd (KTHUF) has not declared an interim dividend due to operating performance and cash flow considerations.
Good morning, everyone, and thank you for joining us. Today, we're looking forward to taking you through our first half FY26 results and our outlook, and also provide an update on the significant progress we're making with our next-level group transformation.
My name is Brent Scrimshaw, and I'm the CEO of the group. And as usual, I'm joined on the call by Carla Webb-Sear, our Group Chief Financial Officer. We'll be talking through the presentation lodged on the NZX and ASX this morning, and unless otherwise specified, all financial numbers are in New Zealand dollars.
I'll begin with an overview of today's announcements before Carla takes you through the detail of our first half results and outlook, and I'll then provide a more comprehensive update on our transformation progress before handing back to Carla, who will step you through the details of the fully underwritten equity raise and long-term debt refinancing package that we're also announcing today.
So starting on slide 8, and today
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