Pumpkin Patch has warned investors ahead of releasing its half-year results on March 21.
The childrenswear retailer confirmed financial results for 2016 will be significantly below the previous year.
It blamed a number of contributing factors to the decline, the most significant being the negative impact on margin of adverse currency movements.
It also noted a further decline in the international wholesale business; the same factors that affected the company’s second half trading in 2015.
Normalised earnings before interest for the half year are expected to fall to $NZ1.5 - $NZ2 million.
This is compared to $NZ9.2 million in the same period last year.
The company confirmed facilities are in place with ANZ Bank, which provide for the company's working capital requirements through to December 2017.
Net debt at 31 January 2016 was $39.6 million compared to $52.7 million at 31 January 2015.
The company said "solid progress" has been made in addressing the issues impacting its international business.
Further information on that progress will be provided as part of the half-year release.
This will include an assessment of any additional provisioning required in relation to the planned closure of loss making stores.