The shares dropped 20.5p to 282p as the company, which describes itself as appealing to 'suburban woman', said sales in the first six weeks of the second half were showing a weaker trend.
Keith Miles, finance director, would not reveal the actual percentage fall, but said: 'Six weeks says to us: be careful. There is something there we don't understand. However, we don't believe it is any great indicator for the full year.'
Etam makes most of its money in the second half, with 25 per cent of sales in November and December alone. The cautious note overshadowed doubled pre-tax profits of pounds 4.7m ( pounds 2.4m), and an interim dividend hoisted 11 per cent to 1.95p against 1.75p last time.
Sales in the 28 weeks to 13 August rose 5 per cent to pounds 113.4m. Etam said the profits improvement was powered by turnover growth combined with good control of profit margins and costs.
Mr Miles said the group had also benefited from 'a better off suburban woman'. Both part-time and full-time employment markets were proving stronger for women than for men, he added.
Etam said its cash pile of pounds 13.7m would be used to refurbish its 224 shops over the next few years.
Julie Ramshaw, retailing analyst at Morgan Stanley, is sticking with her full-year profits forecast of pounds 17.8m.
She said it was always likely the nervous stock market would react negatively to Etam's remarks on trading, but it might have been 'overly pessimistic'.Reuse content