Pre-tax profit at Laura Ashley dropped 44% to £4.3m for the 26 weeks to 31 December 2017, as the weakness of sterling put heavy pressure on its margins.
The business said it now expects its pre-tax profit for the full year to fall below market expectations, although it did not give further details.
Total group sales fell by 7.7% year on year to £134.7m, with total like-for-like retail sales down 0.5%.
Online revenue rose 5.1% to £26.9m, and Laura Ashley announced plans for a new digital platform in the coming months to improve its functionality.
During the period, it terminated its licensing agreements with Aeon Holdings in Japan, Taiwan and Hong Kong, instead aiming to grow online in the region. A new partnership in Thailand and a continuing Chinese presence online now underpin its international strategy.
The company also announced plans to license its hotel concept internationally.
“Trading conditions have continued to be challenging during the first six months of the year,” said Laura Ashley chairman Tan Sri Dr Khoo Kay Peng. “The impact felt due to the weakening of sterling, year on year, was the most significant single factor in the fall of profit before tax.”