Children's clothing company Oshkosh B'Gosh Inc on Friday posted a sharp slide in first quarter net profit to $1.3 million from $5.7m in the year-ago period amid declining store traffic and sluggish consumer spending.

The Wisconsin-based operator of more than 150 stores said net sales fell to $99.3m from $100.8m with same-store sales down 13 per cent due to the "continued difficult retail environment and the late Easter holiday".

Chairman, president and CEO, Douglas Hyde, said: "Looking ahead, we expect some of the trends we experienced in the first quarter, such as declining store traffic and sluggish consumer spending, will continue, which causes us to be cautious in our outlook for the remainder of 2003.

"However, we are encouraged by the progress of our growth initiatives and believe we will begin to benefit from certain of these initiatives in the back half of the year.

"We currently expect net sales for the full fiscal year in the range of $439m to $449m, with retail sales accounting for approximately $248m to $253m of the total. Finally, we expect diluted earnings per share for 2003 to range between $1.85 and $2.00."

He added its new Genuine Kids from OshKosh' sub-brand licensing initiative with Target Stores is proceeding on schedule and will debut this summer.