Childrenswear retailer Pumpkin Patch claims sales in the first four months of this year were "materially impacted" by the Australian federal election.
The retailer expects annual earnings to be in line with 2013, but warns it faces more downside risk for ther remainder of the year.
Profit before reorganisation costs are also expected to be largely unchanged at around $8.5 million in the year ending July 31, 2014.
The company will recognise a $1.5 million charge in the first half due to staff cuts, but expects to have lower costs in future.
Chairwoman Jane Freeman cited the Australian federal election and New Zealand trading conditions as challenges this year.
Pumpkin Patch also encountered supply chain issues when two suppliers failed and major flooding in China left inventory short ahead of Christmas.
The company announced a return to profitability in the 2013 fiscal year.
“After assessing various scenarios on all current known factors, on balance we believe there to be more downside risk than upside potential for earnings for the remainder of the year,” Freeman said.
“We are clearly disappointed that the start of the year has fallen below expectations and that takes the shine off the progress that is being made across the business.”