Clothing retailer Hallenstein Glasson Ltd has posted a 40.7% drop in first-half profit, which it has blamed on an "exceptionally difficult" retail environment and lower margins.

The results are in line with guidance issued last month, and show a net profit after tax of NZD5.48m (US$3.1m), down from NZD9.2m, in the six months to 1 February.

Group sales at the men's and women's wear retailer dropped 2.8% to $95.7m from $98.5m last time.

"We have found it necessary to aggressively promote in order to maintain market share and ensure inventory levels are managed effectively," the company said.

Looking ahead, it said same store sales for the first seven weeks of the winter season have been up 7% on last year, but sales have been achieved on a lower gross margin and overall profitability is marginally down.

"These results indicate some resilience, but the key winter trading months have yet to come and it is much too early to make any pronouncement on earnings for the current period."