KMD Brands (KMD) H2 2025 earnings summary

Executive summary

• Group sales grew 1% year-over-year to $989.0 million, driven by strong direct-to-consumer and online channels, offsetting wholesale softness.

• Underlying EBITDA declined 64.7% to $17.7 million, reflecting margin pressure and higher operating expenses.

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

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

• No final dividend declared for FY25 due to challenging performance.

Financial highlights

• Group gross margin declined by 1.9 percentage points to 56.5% due to increased promotional activity and inventory clearance.

• Operating expenses rose to 54.8% of sales (underlying), up from 53.2% last year.

• Net working capital reduced to $157.7 million, 15.9% of sales, with stock turns improving to 1.65x.

• Net debt at year-end: $52.8 million, with funding headroom of $235 million and all bank covenants met.

• No dividend declared for FY25.

Outlook and guidance

• FY26 group gross margin targeted slightly above H2 FY25, with Oboz gross margin expected to recover in H2 FY26.

• Operating expenses planned to remain broadly flat, with $5 million annualized cost savings from restructuring.

• EBITDA margin expansion expected in FY26, especially in the second half.

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

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