Investors have frowned upon retail shares this year as cost pressures choke household spending and corporate earnings. However, few have felt the bottom-line bother greater than an ASX All Ords stock incapable of clearing a profit in FY2024.

In the last two months, we've seen retailers — including Nick Scali Ltd (ASX: NCK), Myer Holdings Ltd (ASX: MYR), and Premier Investments Limited (ASX: PMV) — lament the difficulty of trying to sell while many are hunkering down from amped-up interest rates. As such, falling revenues have been a common sight in recent results.

Yesterday, one ASX All Ords stock took the disappointment up a notch with its final FY24 numbers.

ASX All Ords retailer bleeding in 'challenging environment'

If a 44% share price decline in the past year wasn't disappointing enough, KMD Brands Ltd (ASX: KMD) did one better yesterday. Not only are most of its investors in the red, but the company's net earnings are now, too.

KMD Brands — which owns outdoor brands Kathmandu, Rip Curl, and Oboz — recorded an 11% fall in group sales to $979.4 million. Underlying (which removes one-off costs) operating earnings took a savage 53% hit to $50 million. But the deepest cut arguably lands at the bottom of the company's accounts.

Statutory (which includes one-offs) net earnings cratered from $36.6 million down to a $48.3 million loss in FY24. A fair chunk of the smack came from a $40.3 million one-off impairment in the intangible value of KMD Brands' Oboz operations.

Nonetheless, even if the one-time value scratch is removed, KMD Brands' net profits tanked to a $1.1 million loss from a $43.3 million profit in the prior year. The dispiriting result reflects the company's inability to reduce operating expenses (4%) at the same pace that customers shrank KMD's sales (11%).

KMD Brands Group CEO Michael Daly commented on the hard retailing landscape with an ounce of optimism, stating:

In a challenging sales environment, gross margin remained resilient despite increased promotional activity for Kathmandu. Operating costs reduced year-on-year despite ongoing inflation pressure, and working capital reduced as inventory investments were carefully managed.

Still, the pain of FY24 was apparent across all three segments. Kathmandu sales fell 15%, Rip Curl dropped 7%, and Oboz collapsed 20%. Interestingly, sales in the North America region were hit the hardest (down 15%), while the 'rest of world' region declined the least (down 3%).

Is it improving?

There are glimmers of improvement from the troubled ASX All Ords stock.

A trading update for the first 8 weeks of FY2025 shows a 2% year-on-year uptick in direct-to-consumer (DTC) Kathmandu Australia sales. However, it's not so pretty in New Zealand, with its DTC segment 23% lower from the prior corresponding period.

In the wholesale channel, KMD Brands is seeing double-digit declines improve to single-digit falls (i.e. from >10% to 9% or less).

The ASX All Ords stock finished yesterday 1.08% lower at 46 cents apiece.