Pumpkin Patch has had a rough year.
The childrenswear retailer has posted a loss of $NZ10.2 million ($AU9.16 million) for the 12 months ended July 31.
This followed a profit of $NZ5.1 million ($AU4.58 million) a year earlier.
Pumpkin Patch noted annual profit excluding reorganisation costs was $NZ1.2 million ($AU1.08 million), in line with its forecast of $NZ1 million ($AU900,000) to $NZ2 million ($AU1.8 million).
However group sales for the year still fell 17 per cent to $NZ240.9 million ($AU216.42 million).
International sales were impacted by a higher New Zealand dollar, although the higher exchange rate reduced import costs.
In Australia, which accounts for about two thirds of sales, earnings before interest and tax (EBIT) fell 34 per cent to $NZ18.9 million ($AU16.98 million) along with sales.
In New Zealand, EBIT dropped 8.4 per cent to $NZ8.4 million ($AU7.55 million) but sales increased 25 per cent to $NZ27.8 million ($AU24.98 million).
Pumpkin Patch has embarked on a two year “transformation process” in an attempt to boost earnings.
“The full impact of the strategic transformation process will not start to be seen until early FY16,” Pumpkin Patch said in a statement.
“The company is expecting lower inventory levels and a continued disciplined approach to capital expenditure and other major spend items to be reflected in lower bank debt in the latter part of FY15.”
Net bank debt rose 34 per cent to $NZ64.9 million ($AU58.31 million).
The company has increased inventory for the new financial year, after being impacted by late deliveries in fiscal 2014.