The downmarket women's wear retailer blamed "unseasonably warm weather" and poorly targetted merchandise when it issued a profit warning in February.
Revealing pre-tax profits cut from £14m to £10.7m in the 12 months to January, the company took the opportunity yesterday to brace the market for a further dip in the first half of the current year.
Etam has still not sorted out its clothes ranges, which explains the appointment earlier this month of Nick Hollingworth as managing director.
He has the right credentials, since he comes from a merchandising background with the Burton group, but he faces an uphill task convincing the City that the company is now on the right track.
Most of last year's uninspiring performance resulted from turnover which fell from £220m to £218m. The company said yesterday that the unsatisfactory trend had continued into the first two months of this year. Although things picked up in April, sales should have anyway had a boost from Easter sales and better weather.
If profits hold at around £10m this year, the shares down 12p at 197p yesterday stand on a forward multiple of 19. Even with last year's dividend raised to 7.7p from 7.5p, they look high enough.