New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>KMD Brands (KMD) provided a mixed 1Q25 trading update.</li><li>Our key positive takeaways were: (1) sales declines in its direct to consumer (D2C) channels are clearly moderating, and (2) gross margins have been more resilient than we had expected.</li><li>This is offset by its wholesale businesses, which remain challenging; improvement is not expected until at least 2H25. </li></ul>

KMD Brands (KMD) provided a mixed 1Q25 trading update.Our key positive takeaways were: (1) sales declines in its direct to consumer (D2C) channels are clearly moderating, and (2) gross margins have been more resilient than we had expected.This is offset by its wholesale businesses, which remain challenging; improvement is not expected until at least 2H25. 

<ul><li>KMD Brand's (KMD) FY24 result was in line with expectations, leaving our positive invest view unchanged.</li><li>The company's key focus over the last half was improving Kathmandu's product and branding, which appears to be gaining some traction. </li><li>Kathmandu's quarterly sales declines continue to incrementally improve, and gross margin dollars through the first eight-weeks of FY25 was up +5% versus the same period last year. </li></ul>

KMD Brand's (KMD) FY24 result was in line with expectations, leaving our positive invest view unchanged.The company's key focus over the last half was improving Kathmandu's product and branding, which appears to be gaining some traction. Kathmandu's quarterly sales declines continue to incrementally improve, and gross margin dollars through the first eight-weeks of FY25 was up +5% versus the same period last year. 

KMD Brands - FY24 Result — On the Trail

<ul><li>KMD Brands' (KMD) FY24 trading update was in broadly in line with our expectations. More importantly, the update implicitly addressed two of the market's key concerns.</li><li>(1) It confirmed sales declines are sequentially getting less worse, suggesting that we could be getting closer to the end of KMD's earnings downgrade cycle (albeit the wholesale channel remains challenging).</li><li>(2) It showed KMD can effectively manage its working capital, inventory, and net debt levels, which eases concerns around its balance sheet. </li></ul>

KMD Brands' (KMD) FY24 trading update was in broadly in line with our expectations. More importantly, the update implicitly addressed two of the market's key concerns.(1) It confirmed sales declines are sequentially getting less worse, suggesting that we could be getting closer to the end of KMD's earnings downgrade cycle (albeit the wholesale channel remains challenging).(2) It showed KMD can effectively manage its working capital, inventory, and net debt levels, which eases concerns around its balance sheet. 

<ul><li>KMD Brands (KMD) provided a disappointing trading update, led by soft winter trading in Kathmandu, and continued wholesale channel weakness for Rip Curl and Oboz.</li><li>While we had expected near-term trading to remain challenging, the consumer backdrop has proven to be weaker than anticipated.</li><li>Accordingly, we materially rebase our earnings forecasts. At this stage, continued cyclical weakness does not change our view that structural challenges within the business can be addressed, and our investment thesis remains intact. </li></ul>

KMD Brands (KMD) provided a disappointing trading update, led by soft winter trading in Kathmandu, and continued wholesale channel weakness for Rip Curl and Oboz.While we had expected near-term trading to remain challenging, the consumer backdrop has proven to be weaker than anticipated.Accordingly, we materially rebase our earnings forecasts. At this stage, continued cyclical weakness does not change our view that structural challenges within the business can be addressed, and our investment thesis remains intact. 

KMD Brands - Consumers Hibernate for Winter

<ul><li>Recent negative trading in KMD Brand's (KMD) Kathmandu business has raised market concerns around the brand's health.</li><li>The key question for us was: how much of the recent challenges are cyclical, and what is more structural?</li><li>Our analysis found that cyclical challenges have been the primary driver of recent trading, however, misexecution on product, price, in-store experience and marketing/branding has exacerbated the problem. </li></ul>

Recent negative trading in KMD Brand's (KMD) Kathmandu business has raised market concerns around the brand's health.The key question for us was: how much of the recent challenges are cyclical, and what is more structural?Our analysis found that cyclical challenges have been the primary driver of recent trading, however, misexecution on product, price, in-store experience and marketing/branding has exacerbated the problem. 

New Zealand

Kathmandu Holdings Ltd. provides clothing and equipment for the travel and adventure market. The Company operates retail locations throughout Australia and New Zealand.

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Kathmandu Holdings (KMD NZ)

KMD Brands - Trekking Through the Cycle

Our key positive takeaways were: (1) sales declines in its direct to consumer (D2C) channels are clearly moderating, and (2) gross margins have...

Forsyth Barr

KMD Brands - FY24 Result — On the Trail

KMD Brand's (KMD) FY24 result was in line with expectations, leaving our positive invest view unchanged. The company's key focus over the last half...

Forsyth Barr

KMD Brands - Positioned to Ride the Wave

KMD Brands' (KMD) FY24 trading update was in broadly in line with our expectations. More importantly, the update implicitly addressed two of the...

Forsyth Barr

KMD Brands - Consumers Hibernate for Winter

KMD Brands (KMD) provided a disappointing trading update, led by soft winter trading in Kathmandu, and continued wholesale channel weakness for Rip...

Forsyth Barr

KMD Brands - Hitting the Trail

Recent negative trading in KMD Brand's (KMD) Kathmandu business has raised market concerns around the brand's health. The key question for us was:...

Forsyth Barr

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