Outdoor clothing chain, Kathmandu, has lifted its first-half profit 10 per cent thanks to stronger sales and improved margins.

Kathmandu made a net profit of $NZ11.4 million ($A10.83 million) for the six months to January 31, up from $NZ10.3 million for the same time a year ago.

Total sales lifted one per cent during the half to $NZ167.6 million, but the company said same store sales were up 5.4 per cent at comparable exchange rates.

“The first half result was achieved through continuing strong same store sales growth, particularly in Australia, combined with improved gross margins and effective management of costs,” CEO Peter Halkett said in a statement on Monday.

The company opened five permanent stores over the half – four in Australia and one in New Zealand – but closed its Westfield White City store in London and an outlook store at Chatswood in Sydney.

Kathmandu expects to open 15 stores over the full financial year.

Halkett said the company expected to lift total sales over the full year, despite an uncertain economic outlook for the Australian retail sector.

“The New Zealand economic environment and consumer sentiment is currently generally positive, but there is more uncertainty in Australia’s prospects, and I anticipate it will continue to be the more challenging retail market during 2014,” he said.

“Nevertheless, our increasing brand awareness and profile in Australia makes me confident that we will see ongoing sales growth this year.”

The company announced an interim dividend of three NZ cents per share, which will be fully franked for Australian shareholders.

AAP