KMD Brands (KMD) investor relations material

Executive summary

• Group sales rose 7.3% year-over-year to $505.4 million for 1H FY26, with all brands returning to growth and Kathmandu leading momentum in Australia and New Zealand.

• Underlying EBITDA surged to $11.5 million, reflecting improved cost discipline and operational leverage, while statutory net loss after tax narrowed to $13.1 million.

• The Next Level transformation strategy delivered early progress, including cost savings, inventory optimization, digital upgrades, and store network optimization.

• No interim dividend declared due to operating performance.

• Equity raise and debt refinancing announced to strengthen the balance sheet and support transformation.

Financial highlights

• Revenue for the half year was $505.4 million, up from $470.9 million in the prior year.

• Underlying EBITDA grew to $11.5 million (2.3% margin), while statutory EBITDA was $63.3 million.

• Gross margin declined by 1.2 percentage points to 56.8% due to a promotional marketplace.

• Net loss after tax was $13.1 million, an improvement from $20.7 million loss in the prior year.

• Net debt at 31 January 2026 was $94.0 million, with net working capital and inventory reduced year-over-year.

Outlook and guidance

• Kathmandu expects further sales and gross margin expansion in 2H FY26, with early trading showing same-store sales up 11.1% year-over-year.

• Rip Curl and Oboz wholesale order books for H2 are in line with last year; gross margin expansion anticipated.

• Underlying operating expenses as a percentage of sales forecasted to improve year-over-year; full-year OpEx to be broadly flat on a constant currency basis.

• EBITDA margin expansion expected in FY26; capital expenditure targeted at the lower end of ~$25 million.

• Targeting leverage ratio below 0.5x net debt to EBITDA by end of FY27.