Luxury handbag and fashion retailer Oroton Group has warned it expects its full-year earnings will slump by more than 75 per cent, sending the company's share price plunging.
The company had entered a trading halt on Monday ahead of releasing soft earnings figures for its key mid-season sale in April.
The stock crashed more than 25 per cent when it resumed trading before recovering slightly to close down 20 per cent. Oroton said its sales fell 11 per cent in first nine months of its financial year including April, with the decline accelerating from a 10 per cent slump in the first six months.
As a result, Oroton flagged underlying earnings of just $2 million to $3 million for the full financial year, down more than 75 per cent from $12.9 million in the prior year.
"Challenging conditions experienced across the retail market in April 2017, with low consumer confidence and a competitive market, has meant the group's April mid-season sales were below management's expectations and reflected a further decline from that seen in the first half," Oroton's interim chief executive Ross Lane said in a statement.
Sales at US fashion chain Gap, which Oroton operates in Australia, had been particularly poor, with its earnings contribution forecast to be down $3.5 million from the previous year.
Oroton's shares were down 18.9 per cent at $1.10 as of 10.53am.
Founded in Sydney in 1938, the company runs 48 Oroton stores across Australia, New Zealand, Singapore and Malaysia, and seven Gap stores.
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