Kathmandu Six Months Results: Hard to Evaluate the Quality

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The first thing to remember as we review Kathmandu’s half year results is the timing of the Rip Curl acquisition.  The acquisition was completed 31 October 2019.  It’s included in Kathmandu’s numbers for the full six months of the period ended 31 January 2021 but for only three months during the prior period’s six months.  The numbers are in New Zealand dollars, each of which costs about US$ 0.70.

Below are the as reported income statements for both periods for the consolidated company.

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Kathmandu Releases First Numbers Including Rip Curl

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Kathmandu released its number for the six months ended January 31 and I’ve finally gotten through the statements.  Maybe the first thing you should do is go read what I wrote when Kathmandu acquired Rip Curl on October 31, 2019.  Here’s the link.  I thought the deal could work, but I was concerned by the lack of solid financial information and wasn’t quite sure the integration was likely to go as smoothly as they projected.  Then the virus hit.

Like I did with Zumiez, I want to focus on the world as it now exists- Not so much on the results for the six months Kathmandu is reporting.  What does that mean exactly?

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Kathmandu Buys Rip Curl: Analysis and Questions

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I admit it.  Before this deal, I’d never head of Kathmandu, a public company headquartered in New Zealand.  If you haven’t either, you can visit their consumer facing web site or their investors web site where you can pour over all the deal related documents I’ve looked at.  Mostly, though, I think you’re happy to leave that chore to me.

Kathmandu “…is a designer, marketer, retailer and wholesaler of clothing, footwear and equipment for travel and adventure. It operates in New Zealand, Australia, United Kingdom and United States of America,” as described in their public filing for the fiscal year ended July 31, 2019.  Below are some summary numbers for its last two full years.

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