Postie Plus Group Ltd said sales fell 5.33% in its fourth quarter from the same period a year ago, meaning it did not meet sales and margin milestones for the year.
The seller of fashion clothing for women, men and children said sales rose 3% in the year to August 1.
The sales report comes ahead of the profit result due on September 24.
The directors said today that the full-year profit would be marginally below last year's result.
Same-store sales for the year rose 3.5% but fell 3.2% in the last quarter.
"Trading in the last quarter is of key importance to the group every year and we targeted our customers strongly in this period; however, as we have seen with other retail announcements, we were not immune from the drop off in demand that has hit the discretionary spend," managing director Ron Boskell said.
He said the annual rise in sales compared well to a flat retail performance across New Zealand.
During the year Jan Cameron, a founder of retailer Kathmandu, upped her stake in PostiePlus, to 19.26%
PostiePlus reported in late May that sales momentum was slowing under the impact of the weak economy.
"At that stage our same store sales through the end of the third quarter were running at a satisfactory increase of 6.5% annualised and we were maintaining good margins," Mr Boskell said.
"Whilst we have managed our stocks well in this time, the unusually weak market conditions during the fourth quarter this year have prevented us from achieving the sales and margin milestones year we were targeting," he said.
The company had now received fresh ranges across the board for postie and babycity stores to open the spring season and its first mailers for the season had opened well.