Bozeman, Montana-based footwear brand Oboz posted gains in the fiscal first half of the year for New Zealand-based parent KMD Brands.
Oboz‘s reported sales jumped 124.3% to NZ$47.5 million ($29.7 million) in the first six months of the fiscal year ended Jan. 31, according to a financial update released last week.
EBITDA was flat at NZ$2.9 million ($1.8 million).
KMD reported the brand is recovering from the supply chain challenges of the previous year, while also seeing online sales gain steam.
“Despite uncertainties in consumer outlook, all three of our brands – Rip Curl, Kathmandu, and Oboz – delivered strong sales growth in the half, and as a group we have improved our gross margin,” said KMD CEO Michael Daly.
Destocking Cycle
Direct-to-consumer sales are performing strongly for Oboz, Daly said in a call with analysts, while wholesale has softened.
“Obviously Oboz is seeing great growth on the back of supply chain issues from last year, but we’re seeing that growth moderate,” he added. “Because all retailers out there are spooked by news about a potential recession, or they just have too much stock and are strategically destocking to make sure they’re not taking so much risk.”
Retailers are holding off on taking more inventory, betting that if they need more supply they can chase it, Daly said.
Daly expects it will take about six-to-nine months for the destocking cycle to play out and finish.
“Then they’ll be aggressively chasing stock again,” he said.
“If the consumer continues to show strong signs of demand across outdoor and surf, which there is no signs of that stopping yet, we certainly know the retailers will be chasing stock.”
The company expects Oboz inventory to be NZ$270 million-$280 million ($161 million-$173 million) by the end of fiscal year 2023.
KMD Numbers
The KMD group recorded sales for the trailing 12 months of more than NZ$1 billion ($625.5 million).
Company-wide sales totaled NZ$547.9 million ($342.7 million) for the six-month period, up 34.5% from a year ago. EBITDA totaled NZ$45.3 million ($28.3 million), compared with NZ$10.2 million ($6.4 million) a year earlier.
KMD’s other outdoor brand, Kathmandu, also recorded an increase in the first half.
Kathmandu sales for the six-month period totaled NZ$194 million ($121.3 million), up 51.2% from the year-ago period.
Meanwhile, first half EBITDA totaled NZ$12.3 million ($7.7 million).
The brand’s performance was driven by a recovery in Australia, with the market seeing a 59% surge in sales, the return of travel in New Zealand, and growing international sales in markets such as Europe and Canada.
Surf apparel brand Rip Curl, the largest KMD-owned brand by sales, saw an 18.8% gain in sales to NZ$306.4 million ($191.6 million) in the first six months of the fiscal year ended Jan. 31.
Bart Schaneman can be reached at [email protected].
