Why is this ASX All Ords share crashing deep into the red on Friday?

why is this asx all ords share crashing deep into the red on friday?

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash

KMD Brands Ltd (ASX: KMD) shares are ending the week deep in the red.

In morning trade, the ASX All Ords share is down 10% to a 52-week low of 35 cents.

Why is this ASX All Ords share crashing?

Investors have been hitting the sell button today after the Kathmandu owner released another disappointing trading update.

As a reminder, during the first half of FY 2024, group sales were down 14.5% compared to the same period last year.

According to today's release, the company's sales in the second half have improved since the end of the first half. However, they are still down compared to the prior corresponding period.

Investors appear particularly disappointed with the performance of the Kathmandu business. Management notes that it has experienced a slower than expected start to the key winter promotional period.

The first three weeks of the winter sale are 11.5% below last year and lower than the improving second half trend. This reflects significant weakness in New Zealand, with Australian sales down in line with current sales trends. They have also improved each week as it progresses further into the winter season.

One positive is that Rip Curl has started its peak summer trade in the Northern Hemisphere. Management notes that direct-to-consumer sales for the USA and Europe for the start of summer are showing positive single digit growth above last year and peak weeks are still to come.

However, Rip Curl and Oboz wholesale customers continue to reduce their inventory in response to the challenging consumer environment.

The sum of the above, is that second half group sales were down 8.4% through to the end of May. This reflects a 5.9% decline in Rip Curl sales, an 8.4% drop in Kathmandu sales, and a 21.8% fall in Oboz sales.

In light of this and based on the most recent sales trends across all brands, the company now expects underlying EBITDA to be approximately NZ$50 million for the full year. This will be down over 50% from NZ$105.9 million in FY 2023.

The ASX All Ords share's managing director, Michael Daly, said:

With six weeks of peak trade still to come, we remain focused on optimising our Kathmandu winter and Rip Curl Northern Hemisphere summer results in a challenging consumer environment. We are seeing a prolonged impact of cost-of-living pressures on consumer sentiment globally but particularly in New Zealand, and we continue to respond tactically to competitive market dynamics. Alongside immediate trading priorities, our focus remains on tightly controlling operating costs, moderating working capital, and maximising cash flows.

Should you invest $1,000 in Kathmandu Holdings Limited right now?

Before you buy Kathmandu Holdings Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Kathmandu Holdings Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 5 May 2024

More reading

    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    OTHER NEWS

    46 minutes ago

    Southwest Airlines announces major change to its seating policy

    46 minutes ago

    Qantas passengers warned to brace for cancellations and delays as 50 Sydney Airport workers go on strike

    46 minutes ago

    Video: Putin's forces are humiliated in footage from one of the biggest recent assaults of the Ukraine war that ended in huge losses: Russia says it is ready for peace talks as it faces losing '1.8 MILLION troops'

    46 minutes ago

    Video: Pictured: Heroic wife who saved her lieutenant colonel husband's life after masked attacker armed with knives and a 'machete' stabbed him outside barracks in broad daylight

    1 hour ago

    Ethan Nwaneri seizes Arsenal chance to impress Mikel Arteta as door to first-team opens up

    1 hour ago

    Ray pitches 5 hitless innings in first start since Tommy John surgery, Giants beat Dodgers 8-3

    1 hour ago

    Ireland 7s face into huge day two after a strong start in Paris

    1 hour ago

    Nissan & Stellantis Hit The Brakes, While Renault Speeds To Highest-Ever Profitability

    1 hour ago

    New signing posts himself for the first time in Kaizer Chiefs colours!

    1 hour ago

    Southwest Airlines is getting rid of open seating

    1 hour ago

    When is Adam Peaty competing at the Paris Olympics?

    1 hour ago

    First British action of the Paris Olympics ‘easier than GCSEs’ – Megan Havers

    1 hour ago

    Ben Stokes says naming unchanged England XI against West Indies ‘easy decision’

    1 hour ago

    The secrets to styling sporty-chic this summer

    1 hour ago

    Swimming-Australia champion will weigh doping protest after racing China swimmer

    1 hour ago

    Gymnastics-Mexico's Moreno vaults into Paris with poise

    1 hour ago

    Tourist fined $12k for flying drone over Marina Bay on first day of S’pore vacation

    1 hour ago

    Grab ends Trans-Cab buyout after provisional ruling that deal would likely flout antitrust laws

    1 hour ago

    Primary 1 registration exercise: 26 oversubscribed schools to hold ballot for Phase 2B

    1 hour ago

    British Gas owner’s profits fall from record highs amid more ‘normalised’ market

    1 hour ago

    Filip Jorgensen wants Chelsea move as Blues hold £20m talks with Villarreal

    1 hour ago

    5 Takeaways From Drake Maye’s First Patriots Training Camp Practice

    1 hour ago

    Florida marina makes unprecedented fuel offering to boaters: 'Honored to be the first'

    1 hour ago

    Merit, Excellence and Intelligence: an Anti-DEI Approach Catches On

    1 hour ago

    Changes Coming For The Notre Dame Tight Ends - Buy/Sell/Hold

    1 hour ago

    Russian fortifies kerch bridge: Rising fear of Ukrainian sea drones

    1 hour ago

    Is Joe Biden in a hospice?

    1 hour ago

    Rural community up in arms over lithium mine

    1 hour ago

    Northern Lights tonight mapped: Exactly where you could see aurora borealis in the UK

    1 hour ago

    Mercury Prize nominations as Charli XCX and The Last Dinner Party up for album of the year

    1 hour ago

    The New Base Audi A5 Stares at You for Not Getting the Passenger Screen

    1 hour ago

    Cost of living vouchers worth £150 made available to households - how to claim

    1 hour ago

    Ukrainian precision strike annihilates russian Buk-M1-2 system

    1 hour ago

    Whizzy deals are part of a pattern at Nationwide

    1 hour ago

    Brits face hefty charges on overseas card transactions, costing millions annually

    1 hour ago

    Thames Water's credit rating downgraded to 'junk' status by Moody's

    1 hour ago

    Households refuse to pay water bills amid pollution crisis

    1 hour ago

    Roman Abramovich's ex-wife Dasha Zhukova is radiant in a black summer dress as she touches her stomach while strolling with Greek billionaire husband Stavros Niarchos in Spetses

    1 hour ago

    Rob McCracken sees bright future for GB boxing going into Paris Games

    1 hour ago

    The trick to avoiding cruise passengers at the Med’s busiest ports

    ALONGWALKER VIETNAM: Kênh khám phá trải nghiệm của giới trẻ, thế giới du lịch ALONGWALKER INDONESIA: Saluran untuk mengeksplorasi pengalaman para pemuda global