Recreational Equipment, Inc. released audited financial statements confirming that its net income more than doubled to $29.8 million from $14.5 million in the prior year. Sales reached $1.45 billion, up 1.4%, or about one point above forecast. REI said direct sales, which include online and catalogue sales, rose 5% compared to a 3.5% decrease in comp store sales, which beat forecasts of a 5% decline.
Gross margins improved 250 basis points to 44.6% of sales, reflecting a $25.3 million drop in cost of sales, which translated to a big jump in operating and net income. Operating income increased 36.6% to $100.6 million from $73.6 million, or 37.8% of sales-about the same as 2008.
After paying out $67.2 million in patronage refunds to co-op members and a $17.5 million provision for income taxes, net income reached nearly $30 million.
Tighter costs controls and cash management led to much improved cash flow from operations, which increase to $145.2 million from $42.3 million a year earlier. Cost controls included the elimination of 61 full-time jobs, a wage freeze, limits on new hiring and tighter inventories.
REI ended the year with inventory valued at $203.0 million, down $3.5 million, or 1.6% from December 31, 2008.
