KMD BRANDS LIMITED (KMD)
Share Price Analysis and Chart

25/09/2025

3

Neutral

-

-

KMD Brands' FY25 group sales beat forecasts by NZ$6m, on higher Rip Curl and Oboz sales, partly offset by lower Kathmandu sales, UBS explains.

Higher-than-forecast operating expenses of around -$10m and lower gross margins resulted in earnings (EBITDA) coming in below the estimate by -21%. Positively, inventory levels fell for the third year, and wholesale trends are improving.

Online sales rose 14.6% in FY25 compared to 13.6% for the prior year. The first seven weeks of FY26 show Kathmandu sales up 19% y/y and gross profit up 11%, inferring a recovery in the brand.

Debt levels also fell, viewed as another positive. UBS lowers its FY26 underlying earnings (EBITDA) forecast by -32% due to higher cost of goods sold assumptions and increased opex.

The FY27-28 earnings (EBITDA) downgrades are less severe due to expected improvements in gross margins and operating leverage.

Neutral rating retained. Target slips -13% to NZ$0.28 from NZ$0.32.

FORECAST
UBS forecasts a full year FY26 dividend of 0.00 cents and EPS of 0.00 cents.
UBS forecasts a full year FY27 dividend of 0.00 cents and EPS of 2.72 cents.

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01/10/2025

3

Hold

$0.25

4.17%

KMD Brands has outlined its “Next Level” turnaround strategy. By FY28, management is targeting a 60% gross margin, operating expenses below 50% of sales, earnings (EBITDA) margins above 10%, and net working capital below 16%.

Management has also initiated a -$25m cost reset to ease cost-of-doing-business (CODB) pressures.

FY25 trading remained volatile, observes the analyst, though Kathmandu sales in early FY26 have improved, with gross profit dollars up 11% in the first seven weeks. Rip Curl delivered $550m in sales but saw margin compression, while Oboz remains loss-making.

Canaccord maintains a Hold rating, cutting its target price to 25c from 27c pending evidence of stronger profitability.

FORECAST
Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of minus -1.45 cents.
Canaccord Genuity forecasts a full year FY27 dividend of 0.81 cents and EPS of 0.91 cents.