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For its year to July, Kathmandu's sales revenue grew 4.6% to $445.3million, earnings before interest and tax gained 7.8% to $57million and reported after-tax profit was up 13.5% to $38million.
The final 9c-per-share dividend took the full year to a record 13c per share. Kathmandu shares rose 2.2% to $2.20 following the announcement.
Kathmandu CEO Xavier Simonet said the company achieved strong same-store sales growth, driven by new products and digital content.
''In addition to top-line growth, continued cost control and working capital efficiency delivered very solid profit growth,'' he said.
Total sales growth in Australia was up 7.9% and New Zealand 3.3%, while its gross margin declined from 62.6% to 62%, which sat in the middle of its long-term target range.
Inventory was down 6.5%, from $95.4million to $89.2million.
Mr Simonet said the company had targeted inventory buying and allocation and improved its sell through in key promotions, which contributed to working capital efficiency.
''The reduction in inventory continues to demonstrate the benefits of investments made in forecasting and planning technology,'' he said.
Mr Simonet said Kathmandu's financial position continued to strengthen during the year and ended it with lower inventory and record low net debt; down from $36.8million a year ago to $6.9million.
Forsyth Barr broker Damian Foster said a ''key highlight'' for Kathmandu was its material debt reduction, with debt gearing now ''very conservative'' at 2.1% and down from 18.1% in full year 2015, he said.
''This has been a key strategic focus and has been primarily underpinned by significant improvements in inventory management; particularly evident in the material reduction in inventory levels per store,'' Mr Foster said.
Around 2014-15, Kathmandu suffered seasonal lacklustre sales results, profit warnings and downgrades, lost $100million in market capitalisation and a halved share price, then had to fend off a hostile 100% takeover bid by almost 20% shareholder Rod Duke, of the Briscoes Group.
Mr Foster said overall results were stronger from Australian outlets and more ''modest'' from New Zealand.
''The key negative for New Zealand was a meaningful pullback in gross margins to 57.9% against 60.1% a year ago,'' he said.
A lack of outlook commentary from Kathmandu was expected, given winter sales next year would be the key driver of full-year profitability.
Mr Simonet said in the year ahead, Kathmandu aimed to continue to grow its core markets, with gross margin and operating efficiency a key management focus.
''We have now delivered two successive years of strong profit growth and four successive quarters of same-store sales growth,'' he said.