Kathmandu has warned that sales and profit margins in Australia are below last year's result, although it was doing better in New Zealand and the United Kingdom.
However, Australia is the the outdoor clothing company's largest market.
Acting chief executive Mark Todd said Australia's pre-Christmas trading performance, over the past five weeks, was below expectations and reflected negative consumer confidence and a difficult retail trading environment.
As a result, he said the company will experience a substantial reduction in the gross profit earned in the critical pre-Christmas trading period, compared with the same time last year.