Kathmandu will pay 1800 of its permanent staff a bonus of $1,000. The company employs 2000 staff.
Milford Asset Management senior retail analyst Frances Sweetman said the Christchurch-based company could have paid its staff a greater bonus.
"A $2 million impact in earnings is very small," Sweetman said.
"They still delivered a stellar result as well as a higher dividend with shareholders so they could have shared a little bit more of that with staff, which really is a key part of the customer experience."
Sweetman said Kathmandu's full-year earnings were a record result, offset from a turnaround in the Australian business.
"The Australian business was the biggest drag on performance a few years ago so the opportunity there was to increase sales from the existing footprint, and in order to do that they needed to improve the customer experience in store and store layout, which they have done very successfully," she said.
The New Zealand business delivered flat earnings, with sales slightly down overall, despite a strong performance in the second half.
Sales for the New Zealand business were down 2.4 per cent.
Kathmandu bought wholesale business Oboz Footwear for an initial sum of $60m in March. The acquisition had little impact on its result.
"It's very difficult to judge the Oboz business yet as we haven't seen much from it but the real strategic importance of that acquisition is how it will help Kathmandu break into the American market," she said.
"This will be a leg of growth for Kathmandu going forward but it will be slow."
Kathmandu chief executive Xavier Simonet said he was delighted with the result.
"Top line growth combined with a focus on cost control, resulted in excellent profit growth," Simonet told the NZX. "We were delighted to achieve record profits this year as we balanced sales growth with gross margin improvement."
Hobson Wealth Partners investment strategist Edward Glennie said the result was in line with the trading update issued to the market in June.
"Kathmandu's designs have got better over the years, more puffer jackets seem to sell better and pretty much now anyone you see round town who is wearing a puffer jacket, nine times out of 10 it's a Kathmandu," Glennie said.
The company opened three new stores in Australia and one in New Zealand in the last financial year.
"I'd like to see the New Zealand business improve," he said. "Retail is a tough space, it's a bit more constructive in Australia and that's been reflected in the results, but I think the New Zealand retail space is hard."
It will pay a dividend of 11 cents per share, bringing its full year payout to 15c.
