KMD Brands Earnings Forecast 2026: Kathmandu Sales Outlook and Growth Drivers

KMD Brands kicked off fiscal 2026 with strong momentum, lifting its first-half earnings outlook amid a Kathmandu sales rebound fueled by Black Friday and Boxing Day surges. The retail group’s focus on premium outdoor gear positions it for steady recovery, with analysts eyeing robust growth through diversified channels and cost efficiencies.

Company Overview and Recent Performance

KMD Brands, listed on the NZX and ASX, operates leading outdoor lifestyle brands including Kathmandu, Rip Curl, and Oboz footwear across New Zealand, Australia, and beyond. Kathmandu remains the powerhouse, driving the bulk of revenue through apparel, gear, and equipment tailored for adventure enthusiasts. The company ended fiscal 2025 with total sales nearing nine hundred ten million dollars, employing close to five thousand staff amid a challenging retail landscape marked by inflation and cautious consumers.

Early fiscal 2026 trading—spanning five months from August to December 2025—delivered group sales growth of seven point nine percent year-on-year. Kathmandu led with a twelve point seven percent same-store sales jump, blending robust online direct-to-consumer gains and physical store traffic. This momentum prompted an upward revision to first-half underlying EBITDA guidance, now pegged between eight million and eleven million dollars—more than double the prior corresponding period’s three million dollars.

First-Half 2026 Earnings Forecast

Analysts project KMD Brands’ underlying EBITDA for the half-year to land comfortably within the guided range, reflecting Kathmandu’s outperformance and cost controls across the portfolio. Group sales could hit around four hundred fifty million dollars, up from prior periods, with gross margins stabilizing near fifty-five percent thanks to selective promotions and supply chain tweaks.

Net profit expectations hover positive, reversing recent losses through one-off gains and operational leverage. Earnings per share might edge toward breakeven or slight positivity, bolstered by Rip Curl’s steady surfwear demand despite softer U.S. wholesale. Free cash flow improves as inventory normalizes post-Black Friday clear-outs, supporting debt reduction and selective dividends.

Metric	H1 FY2026 Forecast	H1 FY2025 Actual	Change Estimate
Group Sales	$450m	$417m	+8%
Kathmandu Same-Store Sales	+12.7%	+5.2%	Accelerated
Underlying EBITDA	$8m-$11m	$3m	+167%-267%
Gross Margin	55%	53.5%	+1.5 pts
Net Profit/(Loss)	$2m-$5m	($15m)	Turnaround

This table summarizes consensus forecasts, highlighting Kathmandu’s pivotal role in the rebound.

Full-Year 2026 Earnings Outlook

Extending the strong start, full-year 2026 underlying EBITDA could reach thirty-five million to forty million dollars, surpassing prior guidance amid sustained consumer spending on premium outdoor products. Total revenue targets nine hundred fifty million to one billion dollars, with Kathmandu contributing sixty percent or more. Analysts forecast earnings growth of seventy-eight percent per annum over coming years, with EPS climbing sixty-nine percent annually through efficiency and market share gains.

Return on equity improves toward ten percent, reflecting deleveraging from peaks. Dividend resumption appears likely, with a modest payout ratio if profits materialize. Risks include currency fluctuations—strong NZD pressures margins—and retail slowdowns, but diversified geography mitigates exposure.

Kathmandu Sales Outlook: Core Growth Engine

Kathmandu’s sales trajectory shines brightest, with same-store growth of twelve point seven percent through early 2026 underscoring brand resonance. Black Friday and Boxing Day events drew record online traffic, converting to higher average transaction values via premium lines like technical jackets and hiking boots. Direct-to-consumer channels, now over forty percent of sales, expand through app enhancements and loyalty programs.

Physical stores benefit from refreshed merchandising and experiential zones, boosting dwell time and upsells. International expansion—U.K. and U.S. online—adds mid-single-digit growth, while domestic markets leverage tourism recovery. Full-year Kathmandu sales forecast exceeds six hundred million dollars, with like-for-like gains of eight to ten percent.

Key segments propel momentum:

• Apparel: Fifty-five percent of sales, driven by versatile, sustainable fabrics.
• Footwear and Gear: Thirty percent, with Oboz integration fueling cross-sells.
• Accessories: Fifteen percent, high-margin impulse buys.

Growth Drivers Across the Portfolio

Several factors underpin KMD Brands’ 2026 ascent.

Rip Curl sustains surf and lifestyle appeal, with direct sales offsetting wholesale softness. U.S. retail footprint grows via owned stores, while boardshorts and wetsuits capitalize on warm-weather demand. Contribution to group EBITDA stabilizes at twenty percent.

Oboz footwear synergies emerge, with Kathmandu co-marketing hiking options to tap eco-conscious consumers. Wholesale channels rebound post-inventory destock.

Macro tailwinds include stabilizing interest rates, wage growth lifting disposable income, and outdoor recreation booms post-pandemic. Sustainability initiatives—recycled materials, ethical sourcing—enhance premium pricing power.

Digital transformation accelerates: AI personalization lifts conversion rates five percent, while omnichannel fulfillment cuts delivery times. Supply chain resilience, hardened by diversification, shields against disruptions.

Strategic Initiatives Fueling Expansion

Management prioritizes five pillars: brand elevation, channel optimization, cost agility, portfolio synergy, and capital discipline. Store rationalization—closing underperformers, opening high-traffic sites—yields ten percent returns on new formats. E-commerce investments yield twenty percent growth, blending seamless click-and-collect.

Cost savings of fifteen million dollars from prior years flow to bottom line, with further efficiencies in logistics and marketing. Debt targets below two times EBITDA unlock buybacks or acquisitions. Partnerships with influencers and events amplify visibility, targeting millennials and Gen Z.

Risks and Challenges to Monitor

Currency headwinds loom: AUD/NZD strength erodes Australian earnings translation. Consumer caution amid elections or slowdowns pressures discretionary spend. Inventory risks persist if promotions falter, though current levels align with sales pace.

Competitive pressures from Decathlon and local rivals demand innovation. Global shipping volatility tests margins. Analysts price in moderate upside, with shares trading at low price-to-sales multiples signaling value.

Risk Factor	Potential Impact	Mitigation Strategy
Currency Fluctuations	-5% EBITDA hit	Hedging, local sourcing
Retail Slowdown	Flat same-store	Promotions, loyalty focus
Supply Chain Disruptions	Margin compression	Multi-supplier model
Competition	Share erosion	Brand differentiation

This table flags headwinds alongside counters.

Market Positioning and Valuation

KMD Brands trades at undervalued levels—price-to-book zero point three times, price-to-sales zero point two times—versus peers at one point four and zero point nine. Analyst targets imply twenty-two percent upside, with PEG ratios near zero point zero one underscoring growth at a discount. Dividend yield, recently ten percent, could resume at three cents per share.

Sector peers like Adairs face similar retail dynamics, but KMD’s outdoor niche offers defensibility.

Investor Takeaways and Long-Term View

KMD Brands enters 2026 with tailwinds: Kathmandu’s surge, portfolio balance, and strategic execution signal earnings inflection. Forecasts pencil in sustained double-digit growth, rewarding patient holders. Management’s track record—navigating COVID losses to profitability—builds credibility.

For investors, the setup blends recovery momentum and structural drivers, positioning KMD as a compelling retail play in Australasia’s outdoor market.