Tuesday’s session is proving to be a rough one for the Kathmandu Holdings Ltd (ASX: KMD) share price after the company released a quarterly trading update.
Within the update – released alongside Kathmandu’s investor presentation – the company noted that COVID-19 lockdowns “significantly impacted” its results for the September quarter.
At the time of writing, the Kathmandu share price is $1.50, 0.2% lower than its previous close.
Let’s take a look at today’s news from the clothing and adventure gear retailer.
Kathmandu struggles through lockdowns
The Kathmandu share price is dipping today after the retailer announced its operating profits for the quarter just been are expected to be $35 million less than those of the first quarter of financial year 2021.
It has declined to give guidance due to continued uncertainty. Though, it is expecting its trading to improve going forward and grow in the second half of financial year 2022.
The company noted that New South Wales, Victoria, the ACT, and New Zealand all experienced severe extended lockdowns over the 3 months ended 30 September 2021.
However, government subsidies that previously existed were scrapped before the most recent lockdowns.
Same-store sales for the 13 weeks ended 31 October dropped over the quarter. Rip Curl saw a 9.4% fall while Kathmandu’s same-store sales dropped 17.6%. Though, when adjusting for lockdowns, those figures become gains of 1.6% and 16.3% respectively.
Additionally, the group’s online sales grew 33.8%, with Rip Curl recording an 11.2% gain and Kathmandu a 58.4% increase.
Further, the Kathmandu share price might be being supported by expectations of a strong holiday period.
Both Rip Curl and Kathmandu expect to see their sales boosted during the Black Friday and Christmas trading periods.
Like many ASX listed companies, the group is experiencing supply chain disruptions, particularly affecting its North American markets. Additionally, the price of its raw materials is still above normal levels.
Fortunately, the order books of both Rip Curl and Oboz are doing better than they were pre-COVID.
Kathmandu share price snapshot
Despite today’s dip, the Kathmandu share price has been performing well on the ASX lately.
It has gained 27% since the start of 2021. It’s also 3.4% higher than it was this time last month.
The post Kathmandu (ASX:KMD) share price goes downhill after $35 million profit hit appeared first on The Motley Fool Australia.
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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