KMD Brands (KMD) investor relations material

Executive summary

• Sales grew 1% year-over-year to $989.0m, with direct-to-consumer and online channels outperforming wholesale.

• Underlying EBITDA fell to $17.7m from $50m last year, a 64.7% decline, due to margin pressure and higher operating expenses.

• Statutory net loss after tax was $93.6m, including a $45.4m non-cash impairment of Oboz intangible assets.

• Net working capital and net debt both reached three-year lows, with net debt at $52.8m and funding headroom of $235m.

• No final dividend declared due to challenging trading conditions.

Financial highlights

• Group gross margin decreased 1.9 percentage points to 56.5% year-over-year, mainly due to increased promotional activity and inventory clearance.

• Operating expenses increased to 54.8% of sales, reflecting ongoing cost pressures and brand investment.

• Online sales were a highlight: Rip Curl up 10.2% to $41.7m, Kathmandu up 9.3% to $52.1m, and Oboz up 18.3% to $8.8m.

• Net working capital reduced to $157.7m, 15.9% of sales, with improved stock turns at 1.65x.

• Group inventory reduced for the third consecutive year, with improved supplier payment terms.

Outlook and guidance

• FY26 group gross margin targeted slightly above 2H FY25, with margin expansion expected in 2H FY26 and US tariff impacts expected to normalize.

• Operating expenses planned to be broadly flat before management incentives, with $5m annualized cost savings from restructuring.

• Net debt targeted below $40m by July 2026; capital expenditure planned at $25–30m.

• Ambition to achieve a 10% EBITDA margin over three years, with gross margin building back to 60%.

• 14 store closures and 6 new store openings planned, including 3 new Kathmandu flagship stores.