Half year profits at Pumpkin Patch are down by 7%, as people spend less on children's clothing.
The company made a profit of $9.5 million in the six months to January, as it lowered prices to hold market share. Sales rose 3% to $211 million.
Like other retailers, Pumpkin Patch has struggled in the recession that's gripped its main markets, particularly Britain and the United States.
In Australia, where it makes nearly half its sales, sales held up fairly well, while New Zealand fell 4%.
The same cannot be said for the northern hemisphere, where the recession is more severe.
Lower sales in Britain and the US saw the company try to cut stock and costs, though both regions reported earnings losses.
While the dividend has been compared to last year, chief executive Maurice Prendergast says Pumpkin Patch has strengthened its balance sheet by repaying almost $50 million of debt as it reduced stock levels.
Looking ahead, the company expects trading to continue to be difficult, particularly in the United States.
At 1.10pm, Pumpkin Patch was up 12c to 95c on the NZX50.