Azzet reports on three ASX stocks with notable trading updates today.
KMD Brands falls on slashed FY25 earnings update
Shares in KMD Brands (ASX: KMD), formerly Kathmandu, were down around 6% at the open after the clothing manufacturer and retailer warned of a 50-70% drop earnings for FY25.
With unseasonably warm weather, including Victoria’s warmest autumn on record, hitting Kathmandu’s winter sales, the company is now forecasting FY25 earnings of between NZ$15 million and NZ$25 million, down from NZ$50 million last year.
Given the depth of the projected earnings fall, it’s surprising that the stock wasn’t sold off more than it was.
Today’s fall means shareholders have now witnessed a 35% drop in the share price year to date.
Group revenue is down 0.5% year-to-date, with Kathmandu sales off 1% for the 10 months to May.
While a June cold snap has driven a partial rebound, with sales up 13.2% in the first 17 days, CEO Brent Scrimshaw described recent volatility as "frustrating."
However, Scrimshaw put a brave face on today’s update and reminded investors that Kathmandu’s significant sales improvement, including strong online momentum in recent weeks, reinforces the company’s enduring brand health.
“The Group is proactively working on a range of initiatives to unlock future growth opportunities across the portfolio, address short-term market challenges and improve medium- to long-term performance and value for shareholders,” said Scrimshaw, who expects to update the market on these initiatives at an Investor Day in September.
While it’s too early to estimate the impact on consumer demand in the U.S., the group anticipates tariffs to impact FY25 earnings by around $1 million.
Rip Curl experienced strong growth in direct-to-consumer sales, particularly in North America, but faced challenges in wholesale sales, while Oboz’s wholesale sales were below last year.
Other noteworthy updates today include:
FY25: Online sales are up 10.7% year-to-date. Since the May upgrade, online sales are up 26.1% from last year. Group gross margin for FY25 year-to-date is 140 basis points lower.
Meanwhile, the group expects net debt at 31 July 2025 to be approximately $70 million. Direct-to-consumer sales performance will be the key cashflow driver for the remainder of the financial year.
KMD Brands’ market cap is $181 million; the share price is down 32% in one year and down 345 year to date.
The stock’s shares appear to be in a long-term bearish trend confirmed by multiple indicators.
Consensus is Moderate Buy.
Meeka Metals tanks on capital raise news
After rallying 14% last week on news it had transition from developer to producer status, Meeka Metals (ASX: MEK) gave back all those gains at the open after the gold developer announced plans for a major capital raise.
The miner announced a $60 million institutional placement to fund the next phase of growth at its Murchison operations.
Proceeds will be used to expand open pit operations, accelerate drilling, and enhance processing capacity, positioning the company for increased production and growth.
While the placement received strong support from existing and new institutional investors, the market seems less confident.
The stock doesn’t appear to carry too much debt. In March 2025, it had zero debt and cash worth $55 million.
However, concerns exist about the company's cash burn rate.
In the last year, its cash burn was $17 million, giving it a cash runway of about 3.2 years from December 2024.
Given that Meeka Metals only reported revenue of $695,000 last year, ongoing cash burn - which increased by 140% last year – can’t continue at that rate without compromising the balance sheet.
Investors should watch closely for the results of the first gold pour from gravity gold - planned for June 2025 – and the first gold sales and cash flow in early July 2025.
Meeka Metals has a market cap of $389 million; the share price is up 400% in one year and up 100% year to date.
The stock appears to be in a strong bullish trend confirmed by multiple indicators.
Consensus does not cover this stock.
Aurelia Metals crashes after updating guidance
Shares in Aurelia Metals (ASX: AMI) were down around 27% at noon after the gold miner’s Investor Day update today outlined information about its operations and future plans.
Two updates today that the market took issue with today were A) an expected drop in gold production to 35,000 to 45,000 ounces in FY26, while B) group operating costs are expected to rise to $275 million to $315 million.
Previously, Aurelia aimed for production of 40,000 to 50,000 ounces of gold in FY 2025 with group operating costs of $185 million to $220 million.
Management told the market that peak operating costs in FY26 reflect higher operating development and process plant throughput.
Operating costs at the Federation mine, which were treated as growth capital in FY25, are now included in operating costs with commercial production expected from 1 July 2025.
While management is guiding to a rebound in gold production from 43,000 ounces to 53,000 ounces in FY27, this is cold comfort given that the group is guiding to operating costs of $290 million to $330 million in FY 2027.
Meantime, while the miner expects another sizeable drop in production to 30,000 ounces to 40,000 ounces in FY28, lower production is expected to be compounded by yet another increase in operating costs to $310 million to $350 million during that year.
Why CEO Bryan Quinn seemingly took ‘great pleasure’ in announcing these results is mystifying.
However, he did try to console investors with reference to the Great Cobar Project, with first production from the mine expected in FY28 in line with the project approval announcement.
“The combined ore from these two mines is planned to be treated in an expanded process plant at Peak, which can maximise revenue through its ability to produce separated concentrates, generating strong cash flow for our shareholders,” he said.
Given that the company announced a loss of $2.9 million on 30 June 2024 for its most recent financial year result, the most pressing concern for investors appears to be Meeka Metals' path to breakeven and profitability.
Aurelia Metals has a market cap of $376 million; the share price is up 30% in one year and down 29% over the last month.
The stock is in a strong bullish trend confirmed by multiple indicators.
Consensus is Strong Buy.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
