KMD Brands posts NZ$93.6 million statutory loss, closes 21 stores as it tightens capital plan

KMD Brands Ltd., the Christchurch-based parent of Kathmandu and Rip Curl, posted a NZ$93.6 million statutory loss for the year ended July 31, 2025, its worst result in at least a decade. The company said the figure reflected a NZ$45.5 million non-cash writedown of its Oboz footwear business and other items, but even on an underlying basis the company recorded a loss of NZ$28.3 million for the year. KMD said it would not pay a dividend, continuing a stance it has maintained since 2023, and stressed that capital would be managed carefully going forward.

KMD announced the closure of 21 stores, largely outside Australia, out of its global portfolio of 328 company-owned Kathmandu and Rip Curl shops. The Christchurch-headquartered company also said it had restructured its business in a move designed to save about NZ$5 million a year. The 2024/25 results compare with a year earlier, when KMD posted a statutory loss of NZ$48.3 million and an underlying loss of NZ$1.1 million. Prior to that, the group had posted profits dating back to at least 2014/15, according to a review of its financials.

Sales for the 2024/25 year rose 1% to NZ$989 million, while operating expenses grew 3.9% to NZ$541.6 million. Rip Curl, the surf lifestyle brand, generated NZ$30.6 million in underlying EBITDA, down 27% from the prior year. Kathmandu posted an EBITDA loss of NZ$1.3 million after a NZ$16 million profit in 2023/24. Oboz Footwear, the Montana-based hiking-boot line, recorded an EBITDA loss of NZ$3.3 million, versus NZ$0.3 million a year earlier. Net working capital stood at NZ$157.7 million as of July 31, down NZ$40.6 million from a year earlier, while net debt was NZ$52.8 million, with funding headroom of about NZ$235 million.

In a potentially bright spot, KMD’s August sales rose 10.5% above last year, and Kathmandu same-store sales were up 22% year over year. In early trading, the company’s ASX-listed shares were up about 2.4% to roughly 21.5 Australian cents, though they remained down about 44.9% for the year. The company said the results reflect ongoing challenges in a difficult trading environment and reiterated that cashflow management would stay at the forefront of its priorities as it pursues a leaner, more selective portfolio.

KMD noted that the 2024/25 results reflect a challenging trading environment across its markets, with broader consumer spending shifts affecting discretionary retailers. The group has been reducing exposure to underperforming assets and markets, including the decision to close 21 stores as part of an ongoing portfolio review. The restructuring, announced earlier this month, is expected to deliver annual savings of about NZ$5 million and support a tighter capital framework.

Historically, the company had enjoyed profitability for more than a decade until the most recent year, underscoring how quickly the balance sheet and earnings have shifted amid changing consumer behavior and inflationary pressures. The August uptick in sales provides a tentative sign of stabilizing demand, but executives cautioned that the market remains volatile and that further steps to optimize the store network and working capital will continue through the current fiscal year.