Craigs Investment Partners broker Peter McIntyre said while competition and the cost of promotions was affecting margins, another contributing factor was foreign exchange hedging coming off contract for Briscoe.
Briscoe's share price rose 1.1 per cent after the announcement, trading at $3.69.
For the past 12 months, its share price was up 28 per cent, with Mr McIntyre saying that was underpinned by benefits from a strong domestic economy.
Briscoe's unaudited sales for the third quarter; the 13 weeks ended October 30, 2016, of $125.6 million, were up 8.38 per cent on the $115.9 million booked for the same quarter last year.
For the quarter, homeware sales increased 7.24 per cent to $79.1 million, while sporting goods increased 10.37 per cent to $46.5 million.
"We expect gross margin percentage to remain under pressure for the balance of the financial year from the continuation of aggressive promotional activity and also the impact of hedged foreign exchange exposures taken across the last 12 months at less-favourable rates than those available currently," Duke said.