DSG International the retailer which owns Currys and PC World, has issued a profit warning.
A Christmas sales period described as "dire" has been the main explantion for the drop in profits.
It has been announced that full year profits before tax are predicted to be about £40 million to £50 million lower than current analyst expectations.
Following the news, DSG shares have fallen 17.4%, nearly 19p, to 88.5p in early trading.
Sir John Collins, group chairman said: "Overall trading for this important period, in which over half our annual profits are usually generated, has been disappointing, particularly in the UK, Italy and Spain".
"This weaker trading, together with a more cautious outlook for the balance of the year, means that we now expect full year profits before tax to be some £40 to £50 million lower than current expectations."
In a recent Pocket-lint reader poll we revealed that 64% of our readership were planning to buy cut-price gadgets in the January sales.