On Monday, RBC Capital Markets adjusted its outlook on KMD Brands Limited (KMD:AU), reducing the stock price target to AUD0.45 from the previous AUD0.50, while keeping a Sector Perform rating on the stock. The revision follows KMD Brands' trading update for the second half of the fiscal year 2024, which indicated a significant slowdown in sales growth.
KMD Brands, known for its Kathmandu, Oboz, and Rip Curl brands, reported a -8.4% decline in sales growth during the second half of the year, a steeper drop compared to the -3.5% observed in the initial four weeks of the same period.
The analyst from RBC Capital Markets noted that the Kathmandu brand experienced a slower start to the crucial winter promotional season, which contributed to the decline. Moreover, there was customer de-stocking in the wholesale channels of Oboz and Rip Curl.
The report from RBC Capital highlights concerns about the near-term prospects for KMD Brands. The company's performance is said to be highly sensitive to the consumer environment, and the latest data suggests that challenges may persist, especially for the Kathmandu brand. The analyst's remarks underscore the impact of the sales deterioration on the company's outlook.
RBC Capital's current Sector Perform rating indicates a neutral stance on KMD Brands' stock, suggesting that the firm does not foresee significant outperformance or underperformance relative to the broader market or sector in the near future.
Investors and stakeholders in KMD Brands are keeping a close eye on the company's performance as it navigates through the reported sales headwinds and the broader impacts on its various brands. The updated stock price target reflects the latest financial indicators and market conditions as they pertain to KMD Brands.
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