What were the key takeaways from the KMD Brands (ASX:KMD) Q3 FY26 trading update?

KMD Brands reported continued performance improvements for the third quarter of the 2026 financial year, driven by its "Next Level" strategy. Total group sales rose by 5.2% year-on-year (YOY) for the three months ended April 26, while year-to-date (YTD) sales increased by 6.6%.

How did Kathmandu perform within the KMD Brands (ASX:KMD) portfolio?

Kathmandu led the group's positive brand performance, posting a 12% sales surge during the third quarter. Additionally, the brand recorded an 8.9% rise in direct-to-consumer same-store sales during the first 12 weeks of the second half of FY26.

Why did Oboz sales decline, and what is its year-to-date status for KMD Brands (ASX:KMD)?

Footwear brand Oboz experienced a temporary setback, with Q3 sales dipping 8.9% YOY. Despite this quarterly decline, the brand managed to keep its YTD performance in positive territory, up 0.4%.

What does the gross margin expansion mean for the KMD Brands (ASX:KMD) investment thesis?

The expansion of KMD's Q3 gross margin to 58.2% (up 258 bps YOY) shows that management is successfully defending profitability despite inflationary pressures. Improving margins across all core brands indicates stronger pricing power or better supply chain efficiencies.

What are the main bull and bear points for KMD Brands (ASX:KMD) after this news?

The bull case rests on Kathmandu’s double-digit sales growth and the group-wide gross margin expansion to 58.2%, proving the "Next Level" strategy is working. The bear case centres on external macro risks, as seen in Rip Curl's softening momentum from high fuel prices and interest rates, alongside Oboz's near 9% sales drop. Growth is currently uneven across the portfolio.

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KMD Brands posts strong Q3 sales growth

Q: What impacted Rip Curl’s sales performance for KMD Brands (ASX:KMD) in Q3 FY26?

Rip Curl maintained positive momentum with a 4.0% sales increase in Q3, supported by favourable foreign exchange impacts and strong results from North American flagship stores. However, sales momentum softened later in the quarter.

Written by Mahathir BayenaPublished May. 26 2026Last Updated May. 26 2026

KMD Brands (ASX:KMD) has reported continued performance improvements for the third quarter of the 2026 financial year, driven by the execution of its "Next Level" strategy.

Total group sales rose by 5.2% year-on-year for the three months ended April 26, contributing to a solid 6.6% increase in year-to-date sales.

The group also achieved a profitability milestone, with its Q3 gross margin climbing to 58.2%—representing a 258 basis point increase YOY, with margin improvements delivered across all core brands.

Brand performance remained largely positive, led by Kathmandu, which posted a 12% sales surge in Q3 and an 8.9% rise in direct-to-consumer same-store sales during the first 12 weeks of the second half.

Surfwear icon Rip Curl also maintained positive momentum with a 4.0% Q3 sales increase, supported by favourable foreign exchange impacts and strong results from North American flagship stores, despite softer momentum following the onset of the Middle East conflict, higher fuel prices, and rising interest rates.

Footwear brand Oboz experienced a temporary setback, with Q3 sales dipping 8.9% YOY, though it managed to keep its YTD performance in positive territory at 0.4%.