Bhs has reported a 40% fall in full-year operating profit from £50 million to £30.2 million for the year ended March 29, 2008.
Total sales at the department store group fell 1.4% to £860.3m and were down 2.9 per cent on a like-for-like basis.
Bhs owner Sir Philip Green described trading as "competitive and unpredictable" after sales at Bhs fell 4% in the past six weeks.
Green abstained from taking a dividend this year. He said: "An operating profit of £30m and cash generation of £70m represents a solid performance in an exceptionally challenging market."
He added: "On a domestic front the market remains competitive and unpredictable. The last six weeks have seen sales down 4%, reflecting not only the market but also the continued impact of the erratic weather patterns."
Bhs increased its capital expenditure by £20m to £53m over the period while the retailer's bank debts of £63m are in line with last year.
Bhs refurbished 14 stores since the beginning of the financial year resulting in a 9% increase in sales above the rest of the chain.
Green added that he had been "very pleased" with the performance of product categories including kidswear, which was up 5%.