The trading update by KMD Brands for the period August 1 to November 30 was softer than Morgan Stanley anticipated across all brands. Sales declined by -12.5% year-on-year compared to the consensus estimate for a fall of -2%, on weaker customer spending.

Sales for Kathmandu, Rip Curl and Oboz fell by -21.6%, -5.7% and -18.2%, respectively.

Sales were impacted by weak consumer sentiment (Kathmandu), explains the analyst, and a weaker wholesale channel (Rip Curl and Oboz).

Equal-weight. Target 80c. Industry view is In-Line.

Sector: Retailing.

Target price is $0.80.Current Price is $0.70. Difference: $0.11 - (brackets indicate current price is over target). If KMD meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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