Kathmandu Holdings has reported a half-year loss following heavy end-of-season markdowns and disappointing summer holiday sales.
The outdoor clothing and equipment retailer lost $1.84 million in the six months to the end of January.
Sales rose 7 percent to $179.4 million.
Acting chief executive Mark Todd said profits had been hit by large markdowns on last winter's clearance items, which significantly reduced gross margins and forced the company to bring forward purchases that might otherwise have been made later in the year.
He said weak sales in Australia were compounded by customers failing to warm to some of its apparel, while promotional campaigns also failed to attract shoppers.
Costs rose by 5 percent due to the opening of new stores and expanding in Britain.
The second half of the year was also off to a weak start.
Sales at stores open at least a year were down about 2 percent, on a constant currency basis, in the seven weeks to the middle of March.
Mr Todd said the full-year result was dependent on Easter and winter sales.
He noted the start of Easter sales had been satisfactory in New Zealand, but soft in Australia.
At midday on Tuesday, Kathmandu's shares had fallen 14 cents to $1.47 each.