MARKET CLOSE: Kathmandu rises on earnings guidance, market flat

Wednesday 19th January 2011

Shares in outdoor clothing and equipment company Kathmandu Holdings closed up 14% today, after the company tipped a 20% to 26% rise in interim earnings from a strong sales performance in December and this month.

The 25c rise in Kathmandu (NZX: KMD ) shares to $2.05 was a standout in an otherwise flat sharemarket, with the NZX-50 index closing up 2.278 points, or 0.068%, at 3346.017. Turnover was worth $68.1 million. There were 40 rises and 34 falls among the 115 stocks listed.

Brokers are updating their forecasts for Kathmandu's annual result in reaction to today's statement.

"They are not saying what the gross margin is but we have got high currencies in both Australia and New Zealand and clearly that is part of the story," one broker said.

The retailer imports product from China. The broker said that winter was the company's biggest sales period. "The second half will be important for them."

Kathmandu's share price traded to $2.10 today, which is a five-month high. The share price is near the price investors paid when the company listed on the ASX and NZX in November 2009.

The Warehouse (NZX: WHS ), which experienced poor trading in the two months to January 2, rose 2c to $3.64 today but is down from around $4.50 in November 2009.

Another standout today was NZ Refining Co (NZX: NZR ), which rose 12c to $4.68.

Among the leaders Fletcher Building (NZX: FBU ) fell 1c to $7.85, and Contact Energy (NZX: CEN ) fell 9c to $6.25, while Telecom (NZX: TEL ) rose 1c $2.28.

Sanford (NZX: SAN ) rose 15c to $4.70, Hellaby (NZX: HBY ) rose 5c to $2.25 and Auckland Airport (NZX: AIA ) rose 3c to $2.24. NZX (NZX: NZX ) rose 5c to $1.73 and Rakon (NZX: RAK ) rose 3c to $1.25. Infratil (NZX: IFT ) rose 1c to $1.94.

Goodman Fielder (NZX: GFF ) rose 1c to $1.69.

Freightways (NZX: FRE ) fell 6c to $3.23 and Methven (NZX: MVN ) fell 5c to $1.69. Hallenstein Glasson (NZX: HLG ) fell 5c to $4.05 and Cavalier Carpets (NZX: CAV ) fell 5c to $3.20. Air NZ (NZX: AIR ) fell 2c to $1.43 and Tower (NZX: TWR ) fell 1c to $1.99.

The local market's flat performance contrasted with strong markets in Asia. Sentiment is said to have improved in reaction to positive comments from European finance ministers and stronger-than-expected results from United States companies.

In the US, stocks gained despite weak Citigroup results and concerns circling Apple after news of chief executive Steve Jobs' medical leave.

The Dow Jones industrial average gained 0.4% to end unofficially at 11,837.93, the Standard & Poor's 500 Index rose 0.1% to 1295.02, and the Nasdaq Composite Index added 0.4% to 2765.85.

NZPA

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