KMD Brands Faces Investor Caution Amid U.S. Tariff Headwinds

Highlights:

• Forsyth Barr cuts KMD Brands’ target price by 21.6% due to tariff risks.
• KMD’s share price has dropped 12% to 33 cents since early April.
• U.S. tariff exposure could materially affect the company’s financials.

Tariff Troubles Weigh on Valuation

KMD Brands Limited (ASX: KMD), the retail group behind well-known outdoor labels like Kathmandu and Oboz, is under investor scrutiny following a significant revision in its share valuation. Analysts from Forsyth Barr, including Paul Koraua and Rohan Koreman-Smit, have warned that the financial impact of new U.S. tariffs could be substantial for the company’s operations, particularly its American sales channel.

In an analyst note released on Wednesday, Forsyth Barr reduced KMD Brands’ target share price by 21.6%, dropping it from 60 cents to 47 cents. While they maintained an “outperform” rating, the downgrade was driven by fears that these tariffs would result in material pressure on the company’s balance sheet.

Share Price Slips Amid Concerns

At the time of writing, KMD Brands' share price has declined by 12% to 33 cents since April 2, when fears of tariffs intensified following a trade policy announcement by United States President Donald Trump. The company’s exposure to the American market, where it has been pushing for growth, now appears more vulnerable amid evolving international trade dynamics.

Strategic Response May Be Needed

Despite the challenging outlook, analysts still view KMD Brands as fundamentally strong. However, they emphasised that the retailer may need to reassess its pricing and supply chain strategies to mitigate the impact of ongoing tariff threats. With global trade uncertainties remaining high, investors are likely to stay cautious unless clearer mitigations are presented.

KMD Brands' performance in the coming quarters will be closely monitored, particularly how it navigates the cost pressures from tariffs without compromising its market share or profitability in the United States.

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