New Zealand Professional Investment Services Firm

Forsyth Barr

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.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<ul><li>Australian consumer weakness weighs on key winter sale period: Revenue guidance of NZ$1.1bn is ~-6% or ~-NZ$66m, below our (and consensus) forecasts of NZ$1.17bn. </li><li>Delayed earnings recovery expectations: While we had anticipated travel tailwinds would support sales through to the end of FY23 (July 2023), this update brings forward our expectations for a weaker consumer outlook from 1Q24 to 4Q23. </li><li>Operating deleverage partly mitigated by cost controls: KMD noted gross margins are expected to be broadly in line with FY22 (~59%).</li></ul>

Australian consumer weakness weighs on key winter sale period: Revenue guidance of NZ$1.1bn is ~-6% or ~-NZ$66m, below our (and consensus) forecasts of NZ$1.17bn. Delayed earnings recovery expectations: While we had anticipated travel tailwinds would support sales through to the end of FY23 (July 2023), this update brings forward our expectations for a weaker consumer outlook from 1Q24 to 4Q23. Operating deleverage partly mitigated by cost controls: KMD noted gross margins are expected to be broadly in line with FY22 (~59%).

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