A major shoe retailer says its sales have taken a hit as the federal budget caused consumers to spend less.
RCG Corporation, which runs The Athlete's Foot chain of stores, has downgraded its earnings forecast in response, sending its share price plunging.
The company said sales in The Athlete's Foot have grown by 2.75 per cent so far this financial year, and the weaker performance has been its wholesale operations during April and May.
That includes the sale and distribution of Saucony sports shoes, Merrell hiking boots, CAT work boots and Sperry Top-Sider boat shoes.
Lower sales have been driven by a drop in consumer confidence in anticipation of, and reaction to, last month's federal budget, the company said.
"This has been further exacerbated by unseasonably warm autumn weather nationwide, which in turn has had a negative impact on sales of winter product," RCG said.
RCG shares dropped 8.5 cents, or 12.2 per cent, to 61 cents, their lowest level in more than nine months.
The company now expects earnings to grow by between 10 and 12 per cent from the previous year's $15.1 million, lower than its previous forecast of 15 per cent growth.
The earnings downgrade marks a significant slowdown in the company's performance, as sales in its wholesale operations had grown by 25 per cent in the first half of this financial year.
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