Oroton Group has seen net profit tumble more than 50% for the first half of the financial year.
The group reported profit of $1.8 million, down from $3.8 million in the same period last year.
Earnings before interest and tax also plummeted 56% from $6.2 million to $2.7 million.
While trade has improved in the first seven weeks of the second half, it is still down on the same period last year.
The shock result has been blamed on falling sales in its GAP business, lower factory outlet sales and its exit from discountinued categories.
Oroton Group chief Mark Newman said this is a "very disappointing" result.
"Positive trade in the second-quarter up to Christmas Day was outweighed by sluggish sales in the first quarter and the much-publicised, highly discounted and soft retail market from Boxing Day onwards where foot traffic to all stores, across all channels and both brands, was lower than last year."
GAP sales fell by 12%, with poor foot traffic during key markdown periods and a poor women's range which did not perform globally.
While Oroton Group remain cautious about the overall market moving forward, strong emphasis has been placed on the recent 30% stake acquisition of The Daily Edited.
The Group has invested $4.5 million into the Australian lifestyle accessories brand in a bid to attract a more youthful customer base.
"Whilst we remain cautious about the overall market, our focus for the remainder of the year is on continuing to grow the core Oroton first retail business, rejuvenating and balancing the important Factory Outlet business contribution, re-setting the GAP brand and providing a strong support platform for The Daily Edited to enable it to continue on its strong growth trajectory," said Newman