Black Country firm Eliza Tinsley has said it is likely to miss market expectations for the year to the end of March.
The engineering firm said that cautious shoppers and stock-cutting triggered by the retail downturn had resulted in an overall reduction in demand.
"Whilst there are signs of the overall trend reversing within this business, the short-term impact will not be mitigated in the current financial year," the company said.
However, the newly acquired MH Berlyn business bucked the downturn in consumer spending and delivered a solid trading performance, the firm said.
The business saw an increase in demand for its greenhouse heating range following the recent cold weather snap.
The Brierley-Hill-based group said it had secured further steel price increases with some of its customers, but negotiations were still continuing with the remainder.
The company warned that this would cause a "level of uncertainty", until negotiations were complete and the costs recovered.
The company announced yesterday that as a result of these " shortterm issues" it was unlikely to meet current market expectations for the financial year ending March 31.