Hallenstein Glasson Holdings, whose shares have shed 21 percent in the past 12 months, said first-half profit will fall about 39 percent, a bigger drop than it flagged in November, after a decline in sales during December.
Sales in December were down about 10 percent on the same month of 2012, the Auckland-based clothing chain said. Chairman Warren Bell had warned of a possible downgrade at the annual meeting on Dec. 12 unless sales picked up in the crucial peak summer trading period.
"The impact December has on profit is particularly significant," the company said. "The business has actively undertaken a review of the performance of all brands and identified areas that were a factor in this downturn. Steps are being put in place to rectify these areas."
Profit in the six months ended Feb. 1 is likely to be $6 million to $6.3 million, down from an earlier forecast of $8 million and a drop from the year-earlier $10.3 million.
Last month chief executive Graeme Popplewell said traditional bricks and mortar retailers had to fight against the rise of online offerings, which were part of a fundamental change in the business model. He is among retailers to have called for the tax department to be more stringent in collection goods and services tax on New Zealander's purchases from overseas websites.
The retailer's shares last traded at $4.25 and have lost about a fifth of their value in the past year, while the benchmark NZX 50 Index has gained about 18 percent. The stock is rated a 'hold' based on five analysts polled by Reuters, with a median price target of $4.40.