Kathmandu's full year net profit has been halved to $20.4 million, a result the new chief executive says is disappointing and below expectations.
The outdoor clothing and equipment retailer - which has extensive chains in New Zealand and Australia - had warned its result would be weak even though sales rose 4 percent to $409 million, but that was due to expansion, rather than an improvement in same store sales.
Kathmandu said the annual profit was hit by carrying too much stock, which had to be aggressively marked down to clear.
It said customers got confusing marketing messages about promotions and clearance items, which hurt profit margins, while weak demand in Australia added further pain, as did the high value of the New Zealand dollar.
The new chief executive of Kathmandu, Xavier Simonet, said the overall result was disappointing, although the fourth quarter winter sales were better than the rest of the year.
He said the outlook for 2016 was better than last year and recent trading had been in line with forecasts, as it looks to revive its fortunes by cost cutting and putting more resources into building its international brand online.
Earlier this month, the sporting goods and homeware retail chain, Briscoes, made an unsuccessful takeover offer for Kathmandu and said it had no confidence Kathmandu's strategy to boost sales and turn around the business would work.
Kathmandu will pay a final dividend of 5 cents a share, bringing the full year payout to 8 cents per share.