So growth totally due to Auzzies and a bit from the US . can we trust the Auzzies to continue this growth..? Who are the Others..as there is already a column for rest of the world ... Maybe Dagobah?
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So growth totally due to Auzzies and a bit from the US . can we trust the Auzzies to continue this growth..? Who are the Others..as there is already a column for rest of the world ... Maybe Dagobah?
Yeah, this one got beaten with the ugly stick pretty hard in late 2018 along with most of the rest of the market but objectively you'd have to say the commentary out of the company has been in marked contrast to that forthcoming from HLG. Same store sales growth really impressed in Q1 at a time when petrol was at record high's so demand seems to be very sticky and growing.
Company is clearly expecting strong profit growth this year and is on historical metrics of PE 11.5 and gross yield 7.6%.
I'm not big on retail in a bearish market but have taken a small stake in this one which appears to have genuine momentum at a time when other retailers may be starting to struggle a bit.
I suspect wealthy baby boomers will want to enjoy premium brand gear and experiences in the outdoors more and more as they head into their retirement years.
This is promising from last update about Oboz - Remain on track to achieve the US$7.1m EBITDA earn-out target for the 2018 calendar year
Sort of says going better than expected ....good one
I think bik that the best is not a recession, so this company can (and likely will) still be performant, but the SP might represent more of a bargain if the bear continues (which i suspect it won't claw us again until the next major event, which my pick will be something from china)
https://www.nzx.com/announcements/329075
Very disappointing and difficult to understand. Same store sales growth for the first 15 weeks was up a whopping 7% in Australia and about 5% in N.Z. and that at a time when fuel prices were at record high's. Now we have what many retailers were saying was a boomer Boxing day sale but add another 7 weeks trading and same store sales are down, WTF ? Must have been a really, really tough late November / December other than Boxing day.
Chalk that one up as my first investment disappointment for 2019...hope its not the first of many...
What does this suggest, if anything, for HLG trading over recent weeks ?
Partially offsetting lower than expected sales to date for 1H FY2019, is a c. 60 bps improvement in retail gross margins to c. 64%.
I like this improvement in gross margins. Could have more influence on profit growth than the reduction in sales have on profit reduction.
https://www.marketscreener.com/KATHM...17/financials/
Analysts are expecting an 11% increase in eps this year. A 4-8% increase in profit, (today's update) on a 7% higher weighted average number of shares on issue (last year weighted average shares on issue 211.261m, source annual report, currently 226.188m shares on issue) is likely to lead to low single digit eps contraction which is extremely disappointing after previous talk of strong growth. There is no way to sugar coat this, this trading update is a real shocker.
Momentum must have fallen off the edge of a cliff with the last 7 weeks sales for it to drag the first 15 weeks strong sales growth down ! We saw what happened to HLG when they posted a more disappointing trading update so I am OUT and not waiting to see the carnage here.
Very pleased I took just a very small opening position which I liquidated this morning at a small loss.
KMD is also in my Share trader competition picks so I am not off to a good start in 2019.
Didn’t take long for first earnings downgrade for the year on the NZX to come through ...and who would have thought it would be Kathmandu, and what a shocker it is
Beagle — with 10% more shares probably lower eps (depending on how they fiddle the numbers) and jeez that includes extra from Oboz. Bit of a disaster eh
What does Balance say now ....yes, downgrades come in threes (at least)
Xavier the optimistic
“Despite sales being below expectation it is pleasing to see the improvement in retail gross margin and continuing strong growth from the recently acquired Obōz business.”
Balancing sales growth and margins tricky and if your assume Oboz is actually making money the Kathmandu business isn’t increasing profits = they got that sales/pricing a bit wrong
I’d expect prices (promotions) and margins to start declining from here
Yeah...real shocker mate. For 7 more weeks trading to drag the first 15 weeks that were up on average 6 % (NZ and Aust) down their latest sales results are a real shocker and does not auger well for the remainder of FY19. Last year's eps was 23.9 cps on weighted average shares on issue of 211.261m. I struggle to see them maintaining that eps now...which suggests this goes back to baseline support on the chart in the range of $2.20-$2.40 (PE 9.5-10), maybe even lower until they can prove they can restore eps growth. BIG nasty surprise to kick off the 2019 investment year.
What does this suggest about other retailers November / December trading ?
Sure is mate. Some of those jackets we saw at Queenstown were stupidly cheap at the mountain warehouse. https://www.mountainwarehouse.com/nz/
Pleased to be out and shall retreat to my kennel and lick my wounds from this one.
It was a great Christmas for a few retailers.Lucky to be up 5% plus.
It was a modest Christmas for most.Lucky to be the same or minus 5% on last year.
It was a very difficult for a lot of retailers.Minus 5% to minus 15%.
KMD's business model has never appealed to me.Sale prices are what I would call normal retail.
You can fool some people some of the time,but not all of the time.
Thoughts....If first half results are so heavily dependent on the summer sale I think Mr Simonet's comment is disappointing and unfortunate.Quote:
Sales for the 15 full weeks to 11 November 2018:
o Kathmandu total sales growth +8.4% at constant exchange rates*1
(excluding Oboz);
o Kathmandu same store sales growth +6.3% at constant exchange rates;*1
o Same store sales growth by country: Australia +7.1%, New Zealand
+5.2%.
OBOZ
For the first quarter of FY2019:
o Oboz sales NZD $15.7m at a gross margin of 39.8%;
o Remain on track to achieve the US$7.1m EBITDA earn-out target for the
2018 calendar year.
Kathmandu's Chief Executive Office Xavier Simonet said "we have seen
continuing demand for core Kathmandu products, following on from a successful
winter last year. We are also pleased with the continuing strong performance
of Oboz and integration into the Kathmandu Group."
Mr Simonet added "we have achieved good sales growth leading into the key
Christmas trading period, and we expect first half profit to be strongly
above last year. However, as always our first half-year result is highly
dependent on the success of our Summer Sale."
Better to be more conservative with the language like some more seasoned retailers comments isn't it ! Something like this would seem to be more appropriate.
"Sales for the first 15 weeks provide encouragement but its too early in the season to give any indication of profitability for the first half".
No way HLG would have lead shareholders up the garden path like that is there...
His credibility has taken a hit at least in my eye's. So...leading on from that I can't help wondering, when is the oboz acquisition going to be eps accretive or even profitable ?...couldn't really get any handle on that from the annual report or the annual meeting transcript ? This seed of doubt about how this was handled puts the lack of transparency regarding the earnings of the Oboz acquisition into question. On the face of it the gross profit margin of 39.8% is well below that for the rest of the company's products and on only $15.7m sales I wonder how they worked out the purchase price of $US60m base price plus up to another $US15m earn out ?
This acquisition was stated to be expected to be mid single digit accretive to eps when the share placement was announced in March 2018 to fund it. One wonders why shareholders are not being told if this is profitable yet and if it is mid single digit earnings accretive to eps then why does it appear that eps growth is headed towards being negative ? Something doesn't seem to add up here ?
Don't think I'll go barking up this tree again anytime soon. Once bitten, twice shy !
I can't see how that's going to happen. For the latest 7 weeks sales to have had such a dramatic effect on the first 15 weeks (more than double the period) the very latest trading performance must be extremely disappointing. That suggests to me that there's some big discounts coming in terms of very heavy summer discounting promotion activity coming which could impact margin.
Balance reckons downgrades come in three's. So this one, (effectively a downgrade on an eps basis) another in late March when they announce the half year and another one before the annual result in due course. $2.00 is on the cards here I reckon, maybe even a bit lower.
I think its plainly obvious we're in a bear market now, (look what's happened to Apple sales, see CNBC.com if you want even more evidence) and KMD will be at best a zero growth eps company for the foreseeable future. People are going to pull their head in with consumer discretionary purchases, (this is not a consumer staple) so the clear risk to flat eps this year is to the downside going forward, if we're not already heading down now.
Ben Graham's well respected valuation methodology was to apply a PE of 8.5 for a no growth company. If they can make 23 cps earnings this year 8.5 x 23 = $1.95.5
If others want to pay more, good luck to them.
The company dropped a really ugly and unexpected downgrade clanger on the market today so a 20-30% correction wouldn't surprise me in the slightest.
There's a massive difference between a strong growth company and a no growth company as you know mate which is why I dropped this thing like a boiling hot potato this morning. When you make an investment mistake for whatever reason, yours's or the company's, in my experience its better to admit it, take the loss on the chin and move on.
Speaking from a customer's point of view. Recently I've been wanting to buy a bag and a few other items at Kathmandu. A few weeks ago in mid December, I saw on their website that sale ends on the 14th January 2019, so I decided to wait a wee bit into the new year before making any purchases.
Is it possible that this lower than expected sales update for the Christmas/Boxing Day period be partly due to Kathmandu making the sale period somewhat extended? Had they made the sale strictly end on boxing day or before end of the year, that would have given customers (like myself) more urgency to rush out and buy everything before the sale was over, and that could have made the December sales figures look better.
Possibly the worst December weather ever made kiwis not want to go on camp, hence buying less camping gears?
Kathmandu sell twice as much in Oz than they do in NZ
NZ sales been going nowhere for years. Last year they were down.
Yesterday’s announcement said Oz sales slightly down. They won’t be repeating last years strong growth in OZ
Oz the problem for F19 - not this impending recession in NZ
Market Value Added MVA is a measure that shows what the market per se thinks of a company. It is the company’s market cap less shareholder equity (the market value of shareholder equity). Positive MVA is good - adding value to equity and all that (rather than destroying value)
KMD’s MVA at Jan18 was $158m (good).
They acquired Oboz and raised $50m capital and the market loved that driving its MVA to an astounding $323m in Aug 18. Yes KMD’s market cap was $743m (up from $485m in Jan18)
Today KMD’s market cap is $528m and it’s MVA has fallen to a mere $78m
So since announcing the Oboz acquisition (and raising more capital) KMD’s MVA has fallen by about $80m (or cut it in half)
Seems like the market per se thinks Oboz is a bit of dud and worse still still have lost confidence in Kathmandu and it’s ability to perform well in the future.
KMD say nz sales are down 2.4% so far this year
Not unexpected so no surprise. Not really a reason to conclude NZ consumers have stopped spending and the country is heading into a recession.
Not unexpected - just look at the chart below - Kathmandu in NZ not doing that well over the years eh ...and this year year looks like much of the same.
From above chart Kathmandu NZ sales up 1.4% since 2014 (cAGR +0.4% pa)
Core Retail sales in NZ are up 24% in same period .....Clothing, footwear etc sector up 16%
Sort of says Kathmandu in NZ are essentially losers .....fast sales in what has been pretty buoyant times.
Makes you wonder eh.
Interesting that Kathmandu, Briscoe and Hallenstein Glassons always go on about challenging market conditions
Over the last 4 years core retail sales (excludes vehicle related spend) have grown at just under 5% pa (Stats NZ)
Wonder what word they’ll come up if things get really ‘challenging’
It's just a word, winner. Not fashionable to use words like "problematic", "difficult" or "disastrous" any more.
;)
http://www.sharechat.co.nz/article/3...-christmashtml
Paymark data is not adjusted for inflation so in inflation adjusted terms sales for the Christmas period are probably down, (depending upon the inflation rate for calendar year 2018). Doubt its just KMD shareholders that will end up being disappointed with this...
Beagle, being an accountant, can you explain to me why Auckland & Northland have 75% of electronic transactions but only 1/3 of sales ?? Is because you buy much cheaper Christmas presents and lots of lattes during shopping, or are we the good folk of Shane Jones' regions still using lots of cheques & cash (but they probably wouldn't show up in Paymarks numbers) ???
LOL Iceman...have another read mate. I believe the 75% reference is a reference to the fact that Paymark process 75% of the countries electronic transactions and nothing to do with Aucklanders propensity to sip latte's :)
The sky is not falling. https://www.nzherald.co.nz/business/...ectid=12186577
You guys should use the winky face, unless you actually seriously believe what you both said. ;)
Sad fact is Baa Baa that a lot of Aucklanders have got used to making more money from their houses than from their jobs and quite a number of them have been drawing down on this increase by extending their mortgages and / or lengthy interest only periods on same. A lot of well healed people have seen their investments take a serious hit over the last few months too. That combined makes the likelihood of acquiring a discretionary high value consumer item at the moment far less likely than it would have been a year or two ago. No winky face because its the truth !
Auckland started outperforming the rest of the country on the downside in the September quarter according to ASB
Signs December quarter worse ....and maybe even heading into recession sometime in 2019
https://www.asb.co.nz/content/dam/as...rd-Q3-2018.pdf
Kmd share price still heading down ...216 as I post
Long way from 275 before that recent announcement — is 12% enough punishment?
Hard to believe the share price hit 346 not that long ago
Xavier’s halo losing its gloss.
Yeap..must admit I saw the opening match price was going to be $2.15 and was tempted having sold out at $2.65 a whopping 50 cents higher last week. Is a 50 cent drop enough punishment is the thought that crossed my mind ? Yeah...NAH...Xavier should have known to be a LOT more conservative with his choice of words, (played far to loosely with the term "strong growth") at the annual meeting update and I reckon he needs a bit more "seasoning" to be a really good CEO so that makes me wonder if whether he might have played far too loosely with shareholders capital with that shoe company acquisition ?
The magic words that investors love to hear "eps accretive" were used in the capital raise but I'm not seeing it. I think the market is starting to wonder too... I think investors have reasonably long memories and will remember he has cried wolf on strong growth and looks set to deliver negative eps growth and I think that dogs the company going forward for quite some time, perhaps indefinitely until they do deliver strong eps growth ?
A number of big name retailers got smashed on the NYSE last night...Target doing well though so I think value is always "on trend" which is not really what KMD is about is it..
Profits are still *forecast* to grow ~5%
I think the bet that they do hit that could be worth it at £2.
Somehow missed your post from last week. That really is a profoundly sad indictment on the Kathmandu brand isn't it !
hardt - Yeah profit growth of ~ 5% but on ~7% more shares on issue due to the capital raise for Oboz acquisition, so eps contraction of ~ 2%. Last year's profit looking more and more like the cyclical peak...same for HLG. I think all the talk about using the oboz footprint as a launch pad for Kathmandu international expansion is something the market will want to see hard evidence of being eps accretive before this climbs out of the low $2's again. That could take years.
PS I couldn't help go on the Reserve bank's inflation calculator and compare. KMD's N.Z. sales in 2014 of $141m with their 2018 N.Z. sales of $143m.
This over a period of time when we've had record level's of new immigrants coming here and record rates of tourism but if KMD's sales had of just kept pace with inflation they should have been $147.64m in 2018, let along kept pace with population growth which has been as much as 2.1% per annum over those years https://www.msn.com/en-nz/money/news...cid=spartandhp.
If sasles had of kept pace with just one of those years population growth, (let alone 4 years of it) sales should have grown from $141m to just on $144m in one year not 4 years.
Its very difficult to come to any other conclusion than that which suggests that KMD is a brand that's mature and in decline in its relevance in the market place in N.Z.
Further, I am sure store rents have gone up by at least the inflation rate over the last few years and looking forward KMD will face very steep labour cost increases in the future with the minimum wage set to rise dramatically in the next 2 years.
The recent arrival of the highly successful and much more attractively priced British chain of Mountain warehouse won't help future prospects either !
www.mountainwarehouse.co.nz I've seen some of their sale prices first hand on a Ski trip in Queenstown last Sept and was blown away with the quality and prices of their ski jackets. $119 for a really good jacket is quite remarkable.
Second that with Mountain Warehouse - looked like great bang for your buck. Won't get as many tourists in there store at Five Mile Frankton, as Katmandu in Central Queenstown, but located just by Kmart so will get plenty of locals going past.
Yep beagle Kathmandu almost a non-event in NZ .....flat sales last 4 years and declining profits. This is in spite of a few more stores and this much touted increase in online sales.
Kathmandu sell twice as much (plus a bit) in Aussie than they do in NZ. All the recent profit growth has come from Australia.
An investment in Kathmandu is essentially an investment in Australia retail ....that’s where Kathmandu fortunes lie and the recent announcement announcement said that wasn’t going too well at the moment.
Stuff I’ve bought from Mountain Warehouse in the UK has been crap .....wouldn’t want to go up the mountains in their gear.
Still a nuisance to KThmandu though
Nice store in Gretna Green though
The past 12 months, I've spent about $750 at Kathmandu. Doing whatever I can to help boost Kathmandu profits.
https://www.nzherald.co.nz/business/...ectid=12212466
https://www.nzherald.co.nz/business/...ectid=12213674
I've sold some of my KMD today as I don't fully feel comfortable going into tomorrow's result. Unfortunately I was a victim of the recent Kathmandu website hack where credit card details were stolen from anyone who bought on their website between 8th Jan - 12th Feb 2019. I think this incident could potentially impact on Kathmandu's reputation and profits in the short term.
As a loyal Kathmandu customer, I feel bloody let down and my trust in the company has been dented.
Yes a lot more pensive but I don't think he was listening to my barking but you hit the nail directly on the head with this comment mate. N.Z. retail a bit softer in yesterday's result announcement. I think the mountain warehouse with their much cheaper but still very good quality gear will continue to nibble around the edges of Kathmandu's lunch.
The NZSA is hosting CEO Xavier Simonet in Auckland tomorrow night. Details here:
https://www.sharetrader.co.nz/showth...l=1#post752924
KMD been in a steady downtrend since mid last year
Today’s close of 218 is 37% off its high ....ouch
Heading to sub 200 .....maybe even 170 looking at the chart
Another stock whose chart looks like a mountain ...good picture if it levels at around 170
Price action suggests not all ok in Kathmandu land.
I lost alot of confidence in Kathmandu after the website hack in mid March. A few hundred dollars was taken out of my credit card after I bought stuff off their website during the hacking window. Thanks to the incompetence of their security team, I had to waste time and go through the trouble of getting the fraudulent transactions reversed at my bank.
Thankfully I was able to get a full refund, but some other affected customers were not as fortunate and couldn't get refunded:
https://www.nzherald.co.nz/business/...ectid=12213674
In my opinion, Kathmandu need to take responsibility and assist affected customers get their money back, because it's all Kathmandu's fault.
When customers go onto the Kathmandu website and enter their private information to buy stuff, they are putting their trust into Kathmandu to keep that data safe. Now that trust has been broken for many customers, including myself.
Makes me think twice about buying off the Kathmandu website again and just buying stuff online in general.
Yep the chart looks awful
Market telling us something ....sentiment gone really sour
But then again some might say that seeing 37% offits highs it must be cheap as and a screaming buy
Once bitten twice shy as far as I'm concerned. Fancy Kathmandu snow jackets are definitely not a consumer staple :)
Getting very close to the perfect opportunity for Briscoes to finally fulfil its Kathmandu wishlist.
What is happening to this share price?? I looked seriously looked into investing 3 months ago, just to diversify a little. Glad I have not, but it is starting to look as a buy. Please explain why I should not buy some..........
Seems to be a piece of the jigsaw missing
Further to the recent announcement by the company?
Did they do a cap raise? Big shareholder selling out? Bought something big?
http://nzx-prod-s7fsd7f98s.s3-websit...916/308898.pdf
Ah ...acquiring Rip Curl
That’s a biggie
http://nzx-prod-s7fsd7f98s.s3-websit...920/308903.pdf
Didn’t know Rip Curl was still a thing. Diversifying in to Surf Wear?
Outdoor equipment,footwear,and now surfing gear.
Be interesting to see whether diversification works for them.
Three very different products.
Its not a bad acquisition esepcially for diversifying the company and aiming for a global position for the long term.
The brand itself is a ebstablish but slow growing one, so the acquisition is really about utilising debt and trying to sell Kathmandu products on a global stage using the channels Ripcurl has already established.
Number wise it adds:
$169 million in new equity, $231 million in new debt ($400 million nzd total).
$52 million in ebitda added.
The timeline of Ripcurl is what interests me, showing a truly global reach that Kathmandu wants:
1990 - Expanded its licensee base in theUS, France and Argentina
1997 -Acquired a wetsuitmanufacturing facility inThailand
2000- Established a jointventure with a Brazilianlicensee, acquiring themsoon after
2005 - Acquired full Indonesianoperation from the company’slong term licensees
2011 - Acquired Ozmosis andWaves surf retail chains
2015 - EstablishedJapanese subsidiary
Interesting, at least now they will have something to sell in Summer:)
three great surf brands rip curl , billabong and quicksilver. 2 went bust in the last few yrs ... says it all
https://www.smh.com.au/opinion/what-...10-gjjctb.html
I assume Briscoes will participate in cap raise
Who would ever of thought of Rod / Briscoes owning about 20% of a surfing gear company ...even though some attachment to Rebel Sport
But Rod is an Aussie after all so might have some affinity
The strong initial enthusiasm this morning for Kathmandu’s big bet seems to be waning a bit after lunch
About $1.2m for Xavier
Suppose deserves every penny of it
http://nzx-prod-s7fsd7f98s.s3-websit...066/314074.pdf
I know - the sky is falling in and all these things, but still nice to do some routine tasks. One can't just buy BBOZ all the day, can you? In my quest to assess the quality of analyst forecasts I look today into KMD.
In February 2019 the KMD share price peaked at $2.54. At that stage the combined mental power of 3 share market analysts forecasted that over the 12 months to February 2020 the KMD shareprice will rise to $2.99 (consensus), i.e. they predicted a 18% share price appreciation.
KMD actually did rise up to $3.60 (I know, February seems now to be so long ago :) ), i.e. it's share price did rise by 42% instead of by the predicted 18%. According to the rules this is a FAIL (of the forecast :) ).
Looking into the consensus buy recommendation - it was in February 2019 a straight "OUTPERFORM"(7.5/10) - i.e. analysts said that the share will outperform the NZX. NZX went up by 21% and KMD went up by 42%, i.e. the analysts have been right in this regard, this is a clear "PASS"
I am doing this exercise as well with other NZX listed stocks - the overview is here:
https://www.sharetrader.co.nz/showth...arket-analysts
15 stocks checked so far (checking for each consensus and buy recommendation);
Consensus shareprice forecasts correct: 2/15; analyst hitrate: 13.3%
Consensus recommendation vs NZX50 correct: 5/15; analyst hitrate: 33.3%
The more I see the shareprice get hammered and the P/E contracting the mote I’m expecting Rod Duke to swoop in with a great takeover
"There has been a recent significant reduction in footfall in Australian and New Zealand stores."
Footfall? This is the type of thing that really annoys me. Foot traffic used to be bad enough. I want to be known as a customer-not just a pair of feet-clumping about the shop.
Last week when I visited a Kathmandu store I must admit there wasn't much footfalling going on.....
It was a Monday though.
Some good bargains too.
I also hate being a punter or a bum on seat (as opposed to a bum on a seat...…).
Kathmandu cutting costs. Smiths City in trading halt and in talks with ASB.
As expected, retail feeling the pains.
https://www.stuff.co.nz/business/industries/120630538/retailer-smiths-city-in-trading-halt-in-talks-with-asb
Considering their product portfolio (aligned with travel & adventure) IMHO Kathmandu is in a poorer position than other retail to dig themselves back out of this.
in a Trading halt
Here it comes ....Kathmandu to raise $207m. https://www.stuff.co.nz/business/ind...oronavirus-hit
50 Cents they giving it away, surely they could have got away with 70c
50c is a fire sale. glad im not in this one. I wonder what impact this might have on BGPs stake....