Poor results from its all-important Clearance period in June and Clearance Clearout in early July has forced retailer David Jones to downgrade its profit guidance for the remainder of 2011 financial year.

"The dramatic and rapid deterioration in trading conditions in fourth quarter of 2011 has been unprecedented,” Paul Zahra, David Jones CEO, said.

“As a result we are taking a cautious approach to the first half of 2012 and have planned and forecast trading conditions to continue to be challenging, with expected negative sales and action to manage inventory levels resulting in our forecast first half of 2012 PAT declining by approximately 15 per cent to 20 per cent compared to the first half of 2011, equating to the first half of 2012 PAT forecast of $84.5 million to $90 million.”

The department store now forecasts total sales for the fourth quarter of 2011 to be approximately -11 per cent and the PAT of second half of 2011 to be between $62 million and $64 million, a decline of 9 to 10 per cent from the corresponding period of last year. This will result in the full financial year of 2011 PAT declining by 0.5 per cent to 2 per cent versus last year, equating to be between $167.7 million to $169.7 million.

At the company’s third quarter sales announcement in May, it had stated that provided there was no further deterioration in trading conditions and April's trading conditions continued throughout the fourth quarter, it expected the PAT for the second half of the 2011 financial year to be approximately +5 per cent.

Despite this, the Zahra reconfirmed that it will continue to focus on its online business, its new point of sale system, store refurbishments and brand installations to leverage business operations.

Meanwhile, its rival Myer has reconfirmed its guidance and anticipates trading conditions would remain challenging for the final weeks of the 2011 financial year.

“Subject to no further deterioration over the final two weeks of our financial year trading, Myer continues to expect net profit after tax (NPAT) for the 2011 financial year to be up to five per cent below last year’s NPAT of $169 million,” Myer said in a statement.