KMD Brands Limited on Wednesday released a trading update for the first four months of the financial year to November 30.

The group revealed sales were down 12.5 per cent below last year.

Ongoing poor consumer sentiment, weather conditions and retailers holding back on new purchases have been blamed for the group’s performance.

Kathmandu has experienced weakness in rainwear and insulation, with total sales down 2.6 per cent.

Meanwhile, Rip Curl was down 5.7 per cent and footwear brand Oboz dropped 18.2 per cent.

KMD attributes those falls to declining wholesale sales, with retailers reducing inventory holdings.

However, Rip Curl and Oboz continued to deliver good results in direct-to-consumer sales.

Group working capital has fallen 10.2 per cent year-on-year.

KMD said gross margin had improved, with operating costs well controlled and managed.

“Black Friday promotions for Rip Curl and Oboz delivered strong sales, as these brands continued to deliver good results in direct-to-consumer channels while navigating short-term weakness in wholesale channels as retailers reduce inventory in uncertain trading conditions,” KMD chief executive and managing director Michael Daly said.

“Improvement in Kathmandu’s sales performance remains our priority.

“We remain focused on optimising gross margin, controlling operating costs and reducing working capital for all of our brands.

“We continue to make progress towards our working capital target of 18 per cent of sales for the full year, which is expected to drive strong cash flow generation in the second half year.”