A combination of cool, wet weather on the Australian east coast and a general slowdown in consumer spending are the main reasons behind Billabong’s profit downgrade.

Late deliveries of products resulting in many unsold stock in the US and Europe has also caused problems for the company.

As a result, the surfwear retailer has revised its market guidance with assumption that net profit after tax (NPAT) for the first half year ending 31 December 2010 would be slightly lower than the prior year in constant currency terms.

Now, it is anticipated that first-half NPAT will be 8 to 13 per cent lower than the prior year in constant currency terms.

Also, the company said this first half year earnings guidance reflects an expected EBIT result in constant currency terms of approximately 25 per cent below prior year, higher interest costs and a significantly lower effective tax rate.