Clothing and equipment retailer Kathmandu has reported a lower profit due to intense competition squeezing its margins.
The company's profit fell 11% to $34.9 million in the year to the end of July.
Sales rose 13% to $347 million, but the retailer says its gross margins fell while costs rose from introducing a new inventory system and relocating key new stores.
Kathmandu now has 120 stores, opening another six in Australia and five in New Zealand over the year.
A key indicator - sales at stores open at least a year - rose on both sides of the Tasman, off-setting weaker sales in Britain.
Kathmandu chief executive Peter Halkett says it is a solid result, given tough trading conditions.
He says the outdoor category remains very resilient both locally and globally, otherwise Kathmandu would not have increased total sales by 13%.
Looking ahead, Mr Halkett expects a better result - as long as the economy does not deteriorate further.
Kathmandu will pay a dividend of 10 cents a share.
Shares in the company rose 3%, or 5 cents to $1.75 on Thursday.