Shares of Superdry fell by more than 17% at the market open after the fashion retailer warned it would do no better than break even this year.
The company, which had previously forecast full year profits of up to £20m, said it had traded well over the Christmas period despite the cost of living crisis.
Superdry added that it could see strong demand for its brand across all geographies and platforms.
But it warned that its wholesale arm had been hit by the impact of shipment timings as COVID continued to cast a shadow over stock deliveries.
The group reported a pre-tax loss of £17.7m for the 26 weeks to 29 October.
That compared with a profit of £4m for the same period last year.
The wholesale woes, the company said, would continue to offset the stronger retail trading it was seeing in the second half of the year.
Sales at stores caught up to pre-pandemic levels in the nine weeks to the end of December, with revenue rising 24.9%.
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Cost of living: Xmas sales fall
Julian Dunkerton, the company’s founder and chief executive, said: “The Superdry brand has real momentum and I’m delighted by how our retail trading continues to strengthen.
“We’ve done this against a difficult macroeconomic backdrop by delivering well-designed, affordable, and responsibly sourced products which have resonated well with customers.
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“Our coats performed really well in the run up to Christmas, and womenswear continues to be a highlight for us.
“Stores continued to recover strongly and online had its biggest ever week over Black Friday, helped by our new ecommerce platform which is delivering real benefits.”
But he added: “Despite the underlying brand recovery, our profits in the first half fell short of expectations mainly due to the underperformance of Wholesale… Whilst we did trade well through November and December, the outlook for the remainder of the year is uncertain and as a result, we are moderating our profit outlook to broadly breakeven.
“We don’t expect market conditions to become easier any time soon, but with a new financing package in place and the brand in great health, we approach the year ahead with optimism.”
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