Group sales were flat at NZ$989.0 million, a 1.0% increase from the previous year
AUCKLAND: KMD Brands Limited, the global outdoor lifestyle company behind Rip Curl, Kathmandu, and Oboz, reported a significant decline in profitability for the fiscal year ended July 2025, citing a highly promotional retail environment and global economic pressures.
Group sales were flat at NZ$989.0 million, a 1.0% increase from the previous year. However, underlying earnings before interest, taxes, depreciation and amortization (EBITDA) fell 64.7% to NZ$17.7 million. The company posted an underlying net loss after tax of NZ$28.3 million, compared to a near-break-even result in FY24.
In response to the challenging results, the company announced its “Next Level” transformation strategy, a three-year plan aimed at rebooting growth and improving profitability. The strategy will be funded in part by an immediate NZ$25 million cost reset over the next 12 months.
“The past year presented a difficult trading environment globally,” said Brent Scrimshaw, group CEO and managing director. “Our focus is now on executing a brand-led offense, enabled by more efficient processes, to deliver sustainable profitability.”
The company’s flagship brand, Rip Curl, saw sales increase 2.1% to NZ$550.4 million, though its underlying EBITDA margin contracted to 5.6%. Kathmandu sales were largely unchanged at NZ$361.9 million but recorded an underlying EBITDA loss of NZ$1.3 million. The Oboz footwear brand saw sales decline 3.5% and took a NZ$45.4 million non-cash impairment on its intangible assets.
A bright spot was strong online sales growth across all brands, with Rip Curl online sales up 10.2%, Kathmandu up 9.3%, and Oboz up 18.3%.
The company ended the year with net debt of NZ$52.8 million, its lowest point in three years, and reported significant funding headroom of approximately NZ$235 million.
For FY26, KMD Brands is targeting EBITDA margin expansion. Early trading for the new fiscal year showed a positive start for Kathmandu, with sales for the first seven weeks up 19.4% year-over-year.
The Group plans to close 21 stores over the coming period, with 14 closures expected in FY26, while simultaneously opening six new stores, including three new Kathmandu flagship concept stores.