The adjusted reported profit was likely to be in the region of $37 million, about 20% lower than the previous corresponding period, chief executive Mark Powell said.
Craigs Investment Partners broker Peter McIntyre said the group's share price fell more than 8% on the news.
Market reaction could be more severe later as the market digested the announcement and awaited clarification.
''This result is a shocker. We had a idea there was relatively good support for retailers with electronic card spending up and retail sales showing signs of growth.
''This announcement is perplexing, to say the least. Something has gone seriously wrong under the bonnet.''
Analysis would be needed on the group's product mix and its acquisitions, he said.
The group said in a statement to the NZX there were weak seasonal sales and margins in the Red Sheds and lower December sales for Noel Leeming.
Mr Powell said the expectation for the first half was for profits to be in line with last year as planned one-off rebranding investments in Noel Leeming and Torpedo7 were absorbed in the first-half.
But in the Red Sheds, the cold and wet spring/summer had resulted in second-quarter sales and margins below expectations, particularly in December.
Noel Leeming first-half sales had been below last year.
The electronics sector as a whole had been subdued as it cycled against the television digital switch over in 2013.
The expected Christmas sales rush did not materialise for Noel Leeming, he said.
Mr McIntyre said Noel Leeming had problems before The Warehouse purchase, and it came out of private equity.
''Maybe they paid too much for it or it was not the right strategy to pursue.''
It was obvious there were problems with the Red Sheds, despite retail sales data showing solid spending in the lead-up to Christmas.
Until the group gave more clarification, it had to be assumed shoppers who would normally go to the Red Sheds either shopped online or went elsewhere, he said.
Details provided by the group showed online sales continued to grow much faster than conventional store sales.
Red Sheds online sales grew more than 30% on the corresponding period last year. More than 20% were ''click and collect'' sales, ordered online and picked up in store.
Mr Powell said the combination of flat sales and lower margins in the Red Sheds and lower sales in Noel Leeming had magnified the impact on first-half profits.
Poor seasonal weather had affected the whole apparel and seasonal products market and the Red Sheds had been forced to sacrifice margin to manage seasonal stock selling.
The group results would be released on March 6.
