Electronics retailer Dick Smith has slashed up to $8 million from its profit forecast as it braces for a not so merry Christmas.
Dick Smith expects a full year net profit of $45 million to $48 million in 2015/16, between $5 million and $8 million lower than its previous guidance.
The downgrade comes after disappointing October sales, and wiped more than $100 million from the company's market value, as its shares dropped 34 per cent, or 43 cents, to 84 cents.
Dick Smith said sales growth in October was well below the level achieved in the previous three months, despite heightened promotional activity.
Chief executive Nick Abboud said October sales have dented the group's expectations for Christmas.
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"Given the October performance and expectations of challenging and variable market conditions, we are cautious about the outlook for the all important Christmas trading period," he said.
Dick Smith's bad news comes a day after electronics and furniture retailer Harvey Norman said its Australian like-for-like sales rose 7.1 per cent in the three months to the end of September, which boosted its share price by three per cent.
IG market strategist Evan Lucas said the market was speculating on how Dick Smith could lose so much momentum in a month while Harvey Norman powers ahead.
"What exactly has happened in October to drop the expectation so drastically is not clear," he said.
"Dick Smith has been short on the detail and the market is punishing them."
Dick Smith's sales growth in the three months to September was 6.9 per cent, while like-for-like sales were up 1.3 per cent from a year ago.
Mr Abboud said September quarter sales rose amid a challenging and competitive environment in Australia and New Zealand.
