Kathmandu shares have plunged by more than 10 per cent after the outdoor clothing retailer warned of a winter sales slump.
The warmer-than-usual autumn and early winter temperatures have dented the retailer’s sales of thermals, fleece tops and down jackets since mid May.
Kathmandu, which has stores in Australia and New Zealand, now fears its underlying earnings could fall by up to 15 per cent this financial year.
Shares in Kathmandu finished 40 cents, or 12.05 per cent, lower at $2.92.
Chief executive Peter Halkett said the sales downturn has been particularly bad in the past fortnight during Kathmandu’s annual winter sale.
He said given the forecast for a relatively mild, dry winter, any pick up in sales before the end of July – the company’s third biggest trading month – would not be enough to offset the recent slump.
“In this period, across all the major metropolitan cities in both countries with the exception of Perth, we have been selling in a period of warmer, drier and generally sunnier weather than last year,” he said.
“The Kathmandu team will be working very hard to achieve the best possible outcome from trading in July, but it is unavoidable that trading through this period will also continue to be influenced by weather patterns.”
Kathmandu is the latest of a string of retailers to report a significant decline in sales due to the warmer start to winter.
Rebel and Boating Camping Fishing owner the Super Retail Group, clothing maker Pacific Brands, discount retailer The Reject Shop and women’s apparel chain Noni B have all issued profit downgrades in recent months due to a fall in consumer confidence and warm weather.
Kathmandu estimates that its earnings before interest and tax for its 2013/14 financial year could fall by between 10 and 15 per cent below last year’s $63.4 million.
CMC Markets chief market analyst Ric Spooner was unsurprised by Kathmandu’s earnings downgrade.
“It follows similar downgrades from other clothing and discretionary retailers,” Mr Spooner said.
“They have a couple of things going against them: the warm weather and the fragility of consumer confidence not helped by the federal budget.”
Kathmandu said it would provide an earnings update in early August ahead of its full year results on September 22.
