Shares in fashion retailer French Connection slumped by more than 20% in early trading today (17 November) after the UK company issued a full-year profit warning.

The retail business said third quarter profit before tax was GBP1.8m (US$2.8m) lower than last year, leading it to admit that it was “unlikely” to achieve its expectations for the full year.

French Connection said UK retail revenue had been good in the early part of the third quarter, but “slowed considerably” following the end of its sale period.

“The UK fashion shopper continues to act very cautiously and, in addition, the unseasonably warm weather has had a negative impact on sales of our winter ranges,” the company added.

UK and Europe like-for-like sales fell 9.5% in the three-month period, but French Connection pledged to maintain its full-price stance and said it still expected revenue in December and January to be up on last year.

Wholesale revenues in the UK and Europe were up 6%, and wholesale forward orders for summer 2012 remained “well ahead” of last year, boosting revenue towards the end of the financial year.

The company’s North America retail business traded broadly flat in terms of revenue and gross margin, while wholesale and the overall trading result were both well ahead of last year.