What Happened to Kathmandu Holdings Share Price?
Shares in outdoor clothing retailer Kathmandu Holdings Ltd [ASX:KMD] enjoyed a welcome bounce today, putting on more than 3.5% to buck the Aussie share market’s gloomy trend. Although Kathmandu shares have recovered well off their mid-September lows, the stock is still down nearly 25% from the all-time high achieved in early May.
Why Did This Happen to KMD Shares?
On Monday morning, Kathmandu announced that its general manager of sales and marketing would quit the firm at the end of this year.
The market seemed to view this as an opportunity for Kathmandu to upgrade its sales leadership, and bid up the share price.
Then, yesterday morning, the company announced its result for the year ending 31 July 2014…a net profit 4.5% lower than the previous year.
A weaker Australian dollar weighed on the result, as Kathmandu reports its earnings in New Zealand dollars. But the market looked past the headlines and took cheer from the strong sales growth that Kathmandu’s Australian stores achieved.
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With a new CEO outlining ambitious plans to expand into Europe and the UK, the market is viewing Kathmandu as a stock that could be going places.
What Now for Kathmandu Holdings Ltd?
Kathmandu has weathered the storms of poor consumer sentiment and unfavourable weather this year.
With the company betting on rich returns from its investment in the UK and Europe, this new direction raises the stakes for investors in Kathmandu.
Success in those markets should see this stock push beyond its all-time highs…but failure to execute could see its price grind back down to the lows it tested in 2012. That makes Kathmandu a risky proposition for investors.
Cheers, Tim Dohrmann+
Small-Cap Analyst, Australian Small-Cap Investigator
Join Money Morning on Google+
The post Why the Kathmandu Holdings Ltd Share Price Popped Today appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
