REI finished 2006 with strong top-line increases and income out-pacing sales gains. Adding to the company’s 9.5% comp-sales increase for the year, REI opened seven new stores. This brought total sales to $1.18 billion for the year, an increase of 15.6%. REI also increased their membership base by 10%, or 551,000 members.

Slightly stronger gross margins, which were up 30 basis points to 44.2%, helped operating income climb 22.8% from $86.0 million in 2005 to $105.5 million this year. After a distribution of $58 million to its active members through the annual patronage refund, net income increased 23.1% to $40.3 million compared to $32.7 million last year.