Surfwear lifestyle brand Billabong International Ltd has reported a smaller-than-forecast 44 per cent rise in yearly profit, on a 25 per cent sales increase.

Full-year net profit leapt 44 per cent to AUD125.4 million, while sales for the year rose to AUD850.8m.

Chief executive Derek O'Neill said: "It was an exceptional year at retail levels and, while the second half was more subdued than the exuberant first half, Billabong maintained strong momentum through to the end of the year".

O'Neill added that he expects Billabong to return to its target of earnings growth of 15 per cent per share in its next year of trading.