Sports and outdoor goods seller KMD Brands, the company behind Kathmandu and Rip Curl, has joined Adairs, Super Retail and Domino’s Pizza in warning of a consumer slowdown which has dampened June quarter trading.
Households battling the inflationary environment, coupled with what it described as an unseasonably warm start to winter, led KMD shares lower on Wednesday’s confession, falling 9.3 per cent to 88¢ in early afternoon trading.
“Recent trading in the fourth quarter … has been more challenging, with increased cost-of-living pressures softening consumer sentiment,” KMD told investors.
KMD’s Michael Daly says company is continuing to moderate its cost base. Louie Douvis
The warning from KMD, which sells items from $140 rain jackets to $800 steamer wetsuits, comes as Reserve Bank governor Philip Lowe cited “slow growth in aggregate demand, particularly in household consumption” in a speech on Wednesday.
The deceleration in economic activity “is also expected to reduce cost pressures on firms and to lead to greater discounting than has been the case over recent times”, he said.
Allan Gray Australia chief investment officer Simon Mawhinney, whose firm has a stake in KMD, said this was yet “another data point that suggests the consumer is cutting back on their spending”.
“It’s very likely that that is the product of rising interest rates and the stretched consumer, and household balance sheet,” he told The Australian Financial Review.
Some companies have so far put on a resilient outlook in the face of a broader slowdown, such as travel outfit Webjet arguing that consumers would still spend on holidays, and Ardent Leisure, the operator of Gold Coast theme parks, on Monday reporting its busiest Easter period “for several
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