15 Jul 2011

Profit forecast cut by retailer

6:01 am on 15 July 2011

Australian retailer David Jones has slashed its profit forecast after a fall in consumer sentiment among its key customer sectors.

David Jones was expecting second-half profit after tax to be up 5% on the same period last year, but it is now expecting a decline of 9% - 12% to between $A62 - $A64 million.

The ABC reports that would leave David Jones's full-year profit down by between 0.5% - 2% versus last year, at between $A167.7- $A169.7 million.

Chief executive Paul Zahra said the company has also slashed its profit expectations for the first half of its 2011-12 financial year.

''The dramatic and rapid deterioration in trading conditions in (the) fourth quarter of 2011 has been unprecedented,'' he said in a statement.

The announcement was made after trading closed on Thursday. Shares in David Jones closed down 18.2% at $A3.20.

Earlier, the Westpac - Melbourne Institute Consumer Sentiment Index showed high income households had a fall in confidence of 11.1% during July compared to an 8.3% fall overall. The ABC reports this sector is one of David Jones's key customer groups.