Department store chain Debenhams has warned that annual profits will be lower than expected after a fall in sales in the run-up to Christmas.
The retailer said underlying pre-tax profits were now likely to be between £55m and £65m this year.
Analysts had been expecting profits to be about £83m.
Debenhams said like-for-like sales in the UK fell 2.6% in the 17 weeks to 30 December amid a “volatile and competitive” market.
It said trading improved over the six-week Christmas period thanks to discounting, with like-for-like sales up 1.2% during that time, but the first week of the post-Christmas sale was below expectations.
“The market has been challenging and particularly promotional in some of our key seasonal categories and we have responded in order to remain competitive for our customers, which has impacted our profit performance,” said Debenhams chief executive Sergio Bucher.
The retailer said it was “accelerating some aspects” of its strategic plan, Debenhams Redesigned, in order to “deliver a long-term sustainable future”.
It said early signs from new store format trials in Stevenage and Wolverhampton were “promising”.
Debenhams added that “reorganisation and restructuring activity” and a review of central costs were expected to generate savings of £20m.