KMD Brands stock (NZKMDE0001S3): Outdoor retailer issues profit warning and flags potential covenant breach

KMD Brands has cut its FY 2025 profit guidance and warned it may breach debt covenants as tough trading in outdoor retail continues. The Kathmandu and Rip Curl owner also outlined cost cuts and banking talks to stabilize its balance sheet.

KMD Brands has warned that it expects a significantly lower profit for its 2025 financial year and could breach banking covenants if trading conditions do not improve, according to an update released in early May 2025 and summarized by Australasian market coverage on the same day. The owner of the Kathmandu, Rip Curl and Oboz brands also flagged cost-saving initiatives and ongoing discussions with lenders as it navigates a difficult environment for discretionary outdoor retail spending.

As of: 05/18/2026

By the editorial team – specialized in equity coverage.

At a glance

• Name: KMD Brands Ltd
• Sector/industry: Outdoor apparel, footwear and equipment retail
• Headquarters/country: New Zealand and Australia (dual-market focus)
• Core markets: Australia, New Zealand, and selected international surf and outdoor markets
• Key revenue drivers: Kathmandu outdoor stores, Rip Curl surf products, and Oboz footwear
• Home exchange/listing venue: New Zealand Exchange (NZX) and Australian Securities Exchange (ASX)
• Trading currency: New Zealand dollar and Australian dollar

KMD Brands: core business model

KMD Brands is a branded outdoor retailer with a portfolio that includes the Kathmandu outdoor chain, surf label Rip Curl and US-based hiking footwear brand Oboz. The group focuses on designing, sourcing and selling technical apparel, footwear and equipment that target travel, camping, hiking and surf customers across Australasia and selected overseas markets, particularly in North America and Europe.

The company’s strategy centers on multi-channel distribution, combining company-operated stores with wholesale and online channels. Kathmandu stores are primarily located in Australia and New Zealand, while Rip Curl products are sold through company-operated surf shops, wholesale partners and e-commerce. Oboz footwear is distributed largely through wholesale and specialty outdoor retailers in North America and other regions.

Brand differentiation is important for KMD Brands. Kathmandu is positioned around outdoor adventure and travel, Rip Curl around surfing and beach culture, and Oboz around technical hiking footwear. This portfolio approach is intended to diversify revenue by season, geography and customer segment, although it can also increase complexity in inventory and marketing management.

Main revenue and product drivers for KMD Brands

KMD Brands generates a significant share of its revenue from Kathmandu stores in Australia and New Zealand, where the brand has long-standing recognition. Sales are driven by seasonal product categories such as insulated jackets, rainwear, backpacks and camping equipment, with peak periods around winter and major promotional events. The company also benefits from travel-related demand when tourism flows are strong and consumers upgrade gear for trips.

Rip Curl contributes through a mix of wetsuits, swimwear, casualwear and surf accessories sold in company-operated stores and via wholesale partners worldwide. Performance in this segment is linked to surf and beach lifestyle trends, as well as broader economic conditions that influence discretionary spending on branded apparel. Rip Curl’s international footprint helps KMD Brands access revenue beyond Australasia, including Europe and North America.

Oboz is a smaller but strategically important part of the portfolio, focused on hiking and outdoor footwear primarily in North America. Growth in this brand hinges on maintaining strong relationships with specialty outdoor retailers and delivering compelling designs that compete with larger global footwear players. Overall group revenue is sensitive to weather patterns, consumer confidence and competitive discounting in the outdoor retail market.

Conclusion

The recent profit warning and covenant risk commentary highlight the challenges facing KMD Brands as it contends with softer demand, promotional pressure and higher financing costs. The company’s diversified brand portfolio, geographic reach and omni-channel strategy remain important features, but near-term earnings visibility is reduced while management executes cost controls and works with lenders. For US-focused investors following global consumer and outdoor names, KMD Brands offers exposure to Australasia and surf and hiking markets, with performance closely tied to discretionary spending trends and balance sheet management.

Disclaimer: This article does not constitute investment advice. Stocks are volatile financial instruments.