KMD Brands (KMD) H2 2025 earnings summary

Executive summary

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

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

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

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

• No final dividend declared for FY25.

Financial highlights

• Group gross margin declined to 56.5% from 58.4% due to increased promotions and inventory clearance.

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

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

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

• Oboz impairment of $45.4m recognized as a one-off non-cash item.

Outlook and guidance

• Targeting group gross margin slightly above H2 FY25 in H1 FY26, with Oboz gross margin expected to recover in H2 FY26.

• Operating expenses planned to be broadly flat in FY26, with $5m annualized cost savings from restructuring.

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

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

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