Outdoor gear retailer Kathmandu has posted a reduced profit for the year to July 31 as profit margins were squeezed and operating costs increased.
The company reported a 10.7% fall in net profit to $34.9 million for the year in what it called a "difficult economic environment".
Kathmandu chief executive Peter Halkett said it was a "solid result" given the difficult economic environment and it was pleasing the company had achieved positive same store sales growth throughout the year.
Operating expenses shot up 18.4% to $153 m on higher rent costs and one-off costs associated with implementing a new warehouse management system in the first half of the year.
Sales increased 13.4% to NZ$347.1m.
For the full year same store sales growth was 5.7%, with New Zealand same stores sale growth outperforming Australian stores.
Earnings before interest and tax were 10.9% lower year-on-year at $57m.
The company opened ten new permanent stores during the year.
The second half year earnings before interest and tax of $44.3m was an improvement on last year following a "difficult" first half, Halkett said.
Provided there was no further deterioration in economic conditions, Kathmandu expected an improvement in performance in the next financial year, Halkett said.
The company declared a final dividend of 7 cents a share, bringing the total dividend payout for the year to 10 cents.
The stock rose 5.29% on the news to $1.79 a share.