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Rip Curl Drives Kathmandu Holdings Q1 Earnings
After adjusting for COVID restrictions e.g. store closures, Rip Curl saw a +26.8% in DTC sales, with strong sales in wholesale and summer product categories. Online sales results for Kathmandu Holdings were positive – 37% higher than last year, however Rip Curl’s individual contribution towards this is unknown.
On November 25 ,2020, Kathmandu Holdings Limited held its Annual Shareholder Meeting and released their Q1 results.
Despite sales that have continued to be impacted by COVID-19 restrictions, Kathmandu’s Group EBITDA for the first quarter is in line with last year’s pro-forma results.
Rip Curl is starting strong with retail stores trading well, where they’re open, and “pleasing” wholesale sell-in for the second half of the year.
Direct to Consumer:
For the 16 full weeks ended 15 November 2020, Rip Curl saw a decline of -1,7% in its DTC stores. However, removing stores that were not able to open this year for a comparable week because of COVID-19 lockdowns (adjusting), Rip Curl registered a +26.8% growth.
Results were much worse for the Kathmandu brand:
- Adjusted -26.8%
- Unadjusted -37.7%.
Online, the group did not detail its results by brand, only stating “+37.0% above last year”
Wholesale
Group wholesale sales for the first quarter, ended 31 October 2020, were -14.4% below last year. No split by brand was published.
Commenting on the trading performance, Group CEO Xavier Simonet said:
“We are realising the benefit of a diversified Group, with strong performance in summer weighted product categories for Rip Curl in all key geographies, following a successful winter trading for Kathmandu.”
“Rip Curl’s strong sales performance in its key markets of Australia, Europe and North America is very pleasing. It highlights the strength of Rip Curl’s global brand and innovative products as more people take to surfing. At broadly pre-COVID-19 levels, wholesale sell-in for Rip Curl for the second half year is also encouraging.”
“As for Kathmandu, camping and footwear categories have over-performed, but have not compensated for the impact of COVID-19 with low footfall in CBD and tourist locations as well as lower travel-related purchases.”
Next quarter will be the crucial holiday trading period. From there, the Group intends to resume dividend payments, subject to market conditions and trading performance.