Kathmandu Holdings stock slumped 19 percent to a two-and-a-half year low after the outdoor goods retailer said Christmas and January trading lagged behind expectations, resulting in a first-half loss.

The loss was $1 million-to-$2 million in the 26 weeks ended Jan. 25, compared with a profit of $11.4 million in the same period a year earlier, the Christchurch-based company said in a statement. First-half sales rose 6.9 percent to $179.2 million.

The company's shares slid 39 cents to $1.62, the lowest level since August 2012. The stock is the worst performer on the NZX 50 benchmark index today.

Kathmandu's earnings failed to meet its expectations during the first half of its financial year after it discounted prices to clear out excess stock, particularly in Australia, which hurt margins. Sales of summer and non-technical clothing didn't meet forecasts across Christmas and January while in New Zealand, sales of cold weather clothing declined after Christmas during an extended period of dry and warm weather.

"It's clearly worse than the market expected," said Matt Goodson, who holds the stock among the more than $700 million in equities he helps manage at Salt Funds Management. "It is critical that they have strong Easter and winter sales."

Kathmandu generates about 60 percent of its sales in the second half of its financial year and some 70 percent of its full year profit.

Before today's announcement, the company was expected to report a 17 percent decline in full-year profit to $35 million, according to analysts polled by Reuters.

Those estimates are now likely to be downgraded, said Salt's Goodson. Investors will be watching to see if the decline in margins is temporary or permanent, he said.

Kathmandu's profit warning may have caught some investors off guard because trading has been mixed across retailers during the period, Goodson said. "It has clearly come as a disappointment to the market given that trading across the retail space hasn't been uniformly poor."

Kathmandu said improvements in its management of seasonal purchasing means its total inventory levels at the end of January were down from the same period a year earlier.

The company will detail its first half earnings on March 24.