UK department store operator Debenhams has warned that first half profit will be hit after snow in January led to a fall in sales.

The company today (4 March) said that it now expects first half pre-tax profit of GBP120m (US$180.46m), compared to GBP127.1m in the same period of the prior year.

It attributed the declines to disruptions in the latter part of January due to snow. While like-for-like sales grew around 3% over the half, during the period affected by snow UK like-for-like sales were down by around 10%, the company said.

The retailer launched a series of promotional events in February focused on Valentine's Day, half-term and the month end. While the events drove some incremental sales, they did not fully recover the sales lost in January.

Margins were also hit by the moves, as the sales generated were mainly on clearance lines. Gross margin for the half is now expected to be flat, instead of the 10 basis point increase Debenhams previously guided to.

"Although the snow will have proved disruptive, the wider problem was that it gave already cautious consumers another excuse not to spend," said Conlumino research director Matt Piner.

"The term ‘January sales' was pretty misleading this year, given that much retailer promotional activity began as early as Christmas Eve. Indeed by the time the New Year arrived many consumers were ‘shopped out' and their thoughts were already turning back to budgeting to protect themselves against an uncertain economy.

"The arrival of the snow from 14 January onwards then further hastened this process meaning that, by the second half on the month, there was very little consumer activity by historic standards. This particularly impacted retailers like Debenhams, which rely on the buzz and excitement surrounding sales periods to generate much of their volumes."

Debenhams' share price has tumbled following the news, down 11.26% to 83.95p per share at 10:57 GMT today.