New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Capital Markets

Kathmandu Holdings / Equity Capital Markets

<ul><li>KMD reported its 1H26 result alongside a NZ$65m capital raising to recapitalise its balance sheet and refinance its debt facilities.</li><li>1H26 group underlying EBITDA of NZ$11.3m, above the top end of its guidance range.</li><li>Trading update for first 6-weeks of 2H26: Kathmandu sales +11% on the prior year, with gross margins +50bps.</li></ul>

KMD reported its 1H26 result alongside a NZ$65m capital raising to recapitalise its balance sheet and refinance its debt facilities.1H26 group underlying EBITDA of NZ$11.3m, above the top end of its guidance range.Trading update for first 6-weeks of 2H26: Kathmandu sales +11% on the prior year, with gross margins +50bps.

KMD Brands (KMD) | 1H26 Result and Capital Raise

Equity Bottom-Up

<ul><li>KMD Brands’ (KMD) five-month FY26 trading update was broadly in line with our expectations at the underlying EBITDA level, albeit the mix was slightly different.</li><li>Sales were up +8% on the prior year, driven by an improvement in wholesale channel sales and a 2% FX translation benefit due to the weaker NZ dollar.</li><li>Despite positive top-line momentum, promotional pressure on gross margins and higher opex are impediments to near-term earnings upgrades.</li></ul>

KMD Brands’ (KMD) five-month FY26 trading update was broadly in line with our expectations at the underlying EBITDA level, albeit the mix was slightly different.Sales were up +8% on the prior year, driven by an improvement in wholesale channel sales and a 2% FX translation benefit due to the weaker NZ dollar.Despite positive top-line momentum, promotional pressure on gross margins and higher opex are impediments to near-term earnings upgrades.

Warehouse Group Limited / Equity Bottom-Up

<ul><li>We expect an improvement in real retail spend in 2026 albeit at a more modest level than some investors may be expecting.</li><li>We forecast +1% to +2% annual growth in real core retail spend in the 12 months to June 2026, with further potential upside constrained by a soft labour market, weak net migration, and a subdued wealth effect.</li><li>The Warehouse Group (WHS) and Briscoes Group (BGP) have most to benefit from an improving NZ consumer spending backdrop.</li></ul>

We expect an improvement in real retail spend in 2026 albeit at a more modest level than some investors may be expecting.We forecast +1% to +2% annual growth in real core retail spend in the 12 months to June 2026, with further potential upside constrained by a soft labour market, weak net migration, and a subdued wealth effect.The Warehouse Group (WHS) and Briscoes Group (BGP) have most to benefit from an improving NZ consumer spending backdrop.

Retail Rundown What’s In Store For 2026

<ul><li>KMD Brands (KMD) shot out of the blocks quickly in FY26, with 1Q26 group sales up +8% on the prior year, albeit at -120bp lower gross margin than the prior year.</li><li>KMD reported 1Q26 sales +8% on the prior year, led by Kathmandu (+14%) and RipCurl (+7%).</li><li>KMD is on track to deliver NZ$25m of annualised cost savings in FY26, though it has previously announced its intention to reinvest NZ$15m back into its growth strategy (NZ$5m committed).</li></ul>

KMD Brands (KMD) shot out of the blocks quickly in FY26, with 1Q26 group sales up +8% on the prior year, albeit at -120bp lower gross margin than the prior year.KMD reported 1Q26 sales +8% on the prior year, led by Kathmandu (+14%) and RipCurl (+7%).KMD is on track to deliver NZ$25m of annualised cost savings in FY26, though it has previously announced its intention to reinvest NZ$15m back into its growth strategy (NZ$5m committed).

KMD Brands 1Q26 Trading Update—Warming into FY26

<ul><li>KMD Brands (KMD) reported FY25 underlying EBITDA (pre-IFRS 16) of NZ$18m, which was at the low end of its guidance range.</li><li>KMD’s FY26 trading update was encouraging—group sales in August were up +11% on the prior year, and Kathmandu direct-to-consumer (D2C) sales for the first seven weeks of FY26 were up +19%.</li><li>While we believe there is value on a mid-cycle basis (c.6x FY28 PE), near-term trading remains too volatile, and the margin for error for KMD too narrow, to have any confidence that the downgrade cycle has bottomed.</li></ul>

KMD Brands (KMD) reported FY25 underlying EBITDA (pre-IFRS 16) of NZ$18m, which was at the low end of its guidance range.KMD’s FY26 trading update was encouraging—group sales in August were up +11% on the prior year, and Kathmandu direct-to-consumer (D2C) sales for the first seven weeks of FY26 were up +19%.While we believe there is value on a mid-cycle basis (c.6x FY28 PE), near-term trading remains too volatile, and the margin for error for KMD too narrow, to have any confidence that the downgrade cycle has bottomed.

New Zealand

Kathmandu Holdings Ltd. provides clothing and equipment for the travel and adventure market. The Company operates retail locations throughout Australia and New Zealand.

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Kathmandu Holdings (KMD NZ)

KMD Brands (KMD) | 1H26 Result and Capital Raise

KMD reported its 1H26 result alongside a NZ$65m capital raising to recapitalise its balance sheet and refinance its debt facilities. 1H26 group...

Forsyth Barr

KMD Brands On The Trail

KMD Brands’ (KMD) five-month FY26 trading update was broadly in line with our expectations at the underlying EBITDA level, albeit the mix was...

Forsyth Barr

Retail Rundown What’s In Store For 2026

We forecast +1% to +2% annual growth in real core retail spend in the 12 months to June 2026, with further potential upside constrained by a soft...

Forsyth Barr

KMD Brands 1Q26 Trading Update—Warming into FY26

KMD Brands (KMD) shot out of the blocks quickly in FY26, with 1Q26 group sales up +8% on the prior year, albeit at -120bp lower gross margin than...

Forsyth Barr

KMD Brands FY25 Result—Fine Margins

KMD Brands (KMD) reported FY25 underlying EBITDA (pre-IFRS 16) of NZ$18m, which was at the low end of its guidance range.

Forsyth Barr

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