KMD Brands (KMD) Trading Update summary

Sales performance and trends

• Group total sales for FY25 YTD were down 0.5% year-on-year, with Rip Curl up 0.4%, Kathmandu down 1.0%, and Oboz down 4.1%.

• Kathmandu direct-to-consumer sales in early June rose 13.2% year-on-year, improving YTD sales to 0.3% above last year.

• Rip Curl's global direct-to-consumer sales grew, especially in North American flagship stores, though wholesale sales remained below last year.

• Oboz wholesale sales trailed last year but showed improvement with new season launches; online sales remained above last year.

• Group online sales grew 10.7% YTD, with Kathmandu's new online platform boosting May sales by 26.1% year-on-year.

Market conditions and operational updates

• Unseasonably warm weather in Australia negatively impacted Kathmandu's insulation sales, but other categories like rainwear and footwear grew.

• Cooler weather in June reignited Kathmandu sales momentum, with school holidays and ski season expected to further support growth.

• Group gross margin for FY25 YTD is 140 basis points lower year-on-year as brands focus on cashflow in a competitive market.

• Group is closely monitoring US tariffs, expecting a $1 million EBITDA impact in FY25.

• Inventory is expected to be lower than FY24, with moderated commitments for FY26 and targeted clearance of end-of-line styles.

Financial outlook and strategic initiatives

• FY25 underlying EBITDA is forecasted between $15 million and $25 million, with significant trade still to come.

• Net debt at 31 July 2025 is expected to be around $70 million, with direct-to-consumer sales as the main cashflow driver.

• All brands are actively managing working capital and expect to comply with amended banking covenants.

• New online trading platform will be rolled out to Rip Curl and Oboz in 1H FY26.

• Initiatives to unlock growth and address market challenges will be detailed at the September Investor Day.