Children's clothing retailer Pumpkin Patch has reported a 3.2% drop in full-year profit to NZD$27.6m (US$19.6m).

Operating revenue for the year was $365.7m, up 17.9% on 2006, following strong sales and EBIT performances from Australia and New Zealand. Domestic retail sales grew 7.8% to $64.3m, despite fickle market conditions in the second half.

The company also reported an increase in the number of stores opened in the year.

UK retail sales grew 29.5%, despite what the company called a soft retail environment, with all major operators reporting disappointing sales results.

US retail sales were US$12.8m, up 236.8% on last year, and up 211.3% to $18.1m in NZD terms. During the year the company opened 11 stores in the US and began selling over the internet.

"The sales and earnings growth that came from Australia and New Zealand is a sign of the strength of the Pumpkin Patch brand in these two very important markets.

"The results from the US, the UK and the new wholesale markets show the brand is being accepted by an ever increasing number of customers in very diverse markets around the world," the company summarised.