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Consensus community valuation
$2.22
Average Intrinsic Value
95.1%
Undervalued by
Active Member Straws
#ASX Announcements
Added 2 days ago

KATHMANDU HOLDINGS LIMITED ASX / NZX / MEDIA ANNOUNCEMENT

Strong sales recovery but uncertainty remains over economic outlook and potential second wave of COVID-19 ? Return to positive same store sales growth as retail stores have reopened ? Continued consumer shift to online ? Strong balance sheet and liquidity position ? Remain cautious about medium-term demand, given economic climate

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#Bull Case
Added 4 weeks ago

Investment Thesis

Kathmandu is positioning itself to be an holdings company of identifiable outdoor brands with the acquisitions of Oboz in 2018 and Rip Curl in 2019.  These brands provide a rounded portfolio that should provide stable revenue streams across the year balancing out the seasons.  There is also an opportunity to leverage the global reach of the different brands to increase the groups reach of the respective brands providing an avenue for sales growth.

Company Performance

Equity and revenue have been growing reasonably consistently around 8-9% a year over the last 10 years.   Return on equity is also sitting at a healthy 11% over the last five years.

EPS has been diluted over the last few years due to recent equity raises to support both the purchase of Oboz and Rip Curl.   An additional equity raise was completed in March 2020 in response to COVID-19 to reduce company leverage which was taken on as part of the Rip Curl acquisition. 

I believe there is sufficient runway and opportunity to continue the growth in equity over the longer term. 

Risks

·        Kathmandu try to expand too quickly through further acquisitions and over leverage the balance sheet.  though I think the current climate will serve as a fair reminder to keep debt down to a manageable level

·        Individual brands lose their identities and thus their brand loyalty / worth

Opportunity

I think COVID-19 has created some real value in the current share price even considering the recent equity raises that have diluted EPS as their growth rates are still relatively attractive.  I Kathmandu could see some positives out of the travel restrictions with people looking at exploring Australia’s back yard and purchasing Kathmandu camping gear.

I am targeting a price of $1.76 as a longer term play.

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# Reopening
Added 2 months ago

Surge in online sales and digital engagement During the month of April, Kathmandu and Rip Curl have continued to trade online in all international jurisdictions, with Kathmandu New Zealand selling only essential items online from 3 April. During April, Group online sales were 2.5 to 3 times higher than last year, with the highest growth rates in Australia, the Group’s largest market. Online sales g

 

Plans for reopening physical stores are well advanced and the Group looks forward to welcoming customers back into stores only when it is safe to do so. In Australia, over recent days, most Kathmandu and Rip Curl stores in New South Wales and Queensland have reopened on a trial basis, with robust safety protocols in place. The majority of Australian Kathmandu and Rip Curl stores are expected to reopen by the end of this week.

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#ASX Announcements
Added 3 weeks ago

Kathmandu to be added to S&P/ASX 300 Index

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#Bull Case
Added 3 weeks ago

Outdoors - Impressed by the latest announcement and the fact that stores are beginning to reopen now. People who have been kept indoors for extended periods (myself included) must be bursting to get outdoors and with not many places open to visit I see people exploring their own backyards. This can only be good news for Kathmandu. 

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#Bear Case
Last edited 6 months ago

Online reviews of kathmandu seem to be bad. Especially on productreviews.com. Mainly related to service provided in stores 2/5! Sounds horrendous. But then I looked at peter alexander - 2.5. Lovisa 2/5 as well! Apple 2.1. Makes sense - i only do online reviews when Ive had a really bad experience with a shop or product - but rarely for good service. 

A positive is that reviews of kathmandu as a workplace seem to be high.

Online reviews are probably unreliable - but ive also read some thoughts from nz investors who claim kathmandu doesnt have the strongest reputation in nz.


update - tried to do this again. Read some of the reviews - generally very negative ???? and worried about my bull case... but then also looked up macpac and rating similarly low.  I suppose the only review that matters is my own - bought several of their products last year before becoming a shareholder. Online was easy. No issues to date. Happy enough customer and positive feedback from random mcg security guard enough to buy shares.

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#History
Added 5 months ago

Hello hepasid, I too look at online reviews but my personal review of the products themselves has been 5/5 (disregarding the price tag).

 

I just stumbled on this after a screen and saw really good positive growth in this company.

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