Why did KMD Brands (KMD) shares struggle today?
KMD -9.28%: the NZ based retailer slipped to a 9-month low after flagging a soft finish to the 31 July year-end. KMD, which owns Kathmandu and Rip Curl, said they expect a record year for sales of $NZ1.1b, up from last year’s $980m but around 5% short of expectations. This fed into a larger miss on EBITDA expectations with the company expecting $NZ105-110m, around 15% short of market expectations. The announcement pointed to a slow start to Q4 with weakening consumer spend and a warm winter weighing on Kathmandu sales. We like the KMD business, however, it is likely to take some time before the market adjusts expectations to realistic levels after today’s update.