A "challenging sales environment" has left Kathmandu and Rip Curl owner KMD Brands with an 11 per cent drop in sales through the 2023/24 financial year.
Group sales by the outdoor equipment and surf clothing brand owner fell to $NZ979 million ($A901 million), with the group attributing the loss to weak consumer confidence.
On Wednesday, KMD Brands CEO Michael Daly said despite Rip Curl and Oboz Footwear hitting record sales last year, all brands under the umbrella were facing headwinds due to the economic landscape.
“We continued to experience the effects of weakness in consumer sentiment," he said.
"Sales were 11.2 per cent below last year’s record result and decreased for all three of our brands.
“In a challenging sales environment, gross margin remained resilient despite increased promotional activity for Kathmandu."
The New Zealand-based company reported a $NZ48 million ($A44 million) slump in its net profit after tax, with Kathmandu being the biggest loss contributor with a 14.5 per cent decrease in sales.
KMB Brands' underlying profit declined by $NZ1.1 million ($A1 million) and earnings before interest and tax was $NZ20 million ($A18 million) in the red.
"The wholesale channel has been more challenging for (Rip Curl and Oboz) as wholesale accounts continued to reduce their inventory to manage risk in a challenging economic environment," Mr Daly said.
However, he celebrated reducing the operating costs of the business year-on-year despite inflation pressure, taking the underlying 2023 operating expenses from $NZ546 million ($A500 million) to $NZ526 million ($A484 million) in 2024, with a statutory of $NZ469 million ($A431 million).
Mr Daly said KMD Brands adapted to the economic landscape by focusing on simplifying the business to drive cost efficiency.
“We remain cautious on consumer sentiment, given the challenging global macroeconomic environment," he said.
"Global inflationary pressures are easing, but it will take time to directly impact consumer spending.”
KMD Brands passed on paying shareholders a dividend this cycle and shares in the company fell 2.1 per cent on Wednesday.
Year to date, its shares have fallen 35 per cent.
