Sales from the group’s 71 UK stores and 169 concessions fell by 11.1 per cent between 1 January and 28 February.
Despite a 16.2 per cent leap in online revenues, total sales for the two months dropped 1.7 per cent year-on-year.
Quiz said it now expects group underlying earnings of around £4.5 million for the year to 31 March.
This is down from the £8.2m forecast by the group in January, when it last warned on sales and profits after disappointing Christmas trading, reducing full-year expectations from the £11.5m estimate made in October.
The retailer also warned that full-year sales were now expected to come in at around £4m lower at £129m, with heavy discounting to shift stock set to affect its profit margins.
Chief executive Tarak Ramzan has now launched a review of “all aspects” of the business to combat the tough trading conditions. He is to report back as the company issues full-year results in June.
Quiz said: “The uncertain consumer spending backdrop has remained challenging for Quiz. As a result, the group has recorded a significant shortfall in sales compared to the board’s prior expectations.”
Neil Wilson, chief market analysts at Markets.com, said: “Profits warnings seldom come alone – and Quiz has proved the rule again. Its third profits warning in less than six months is a humdinger.
“Things do not look great for the retailer as it’s been forced into heavy discounting to shift stock, which has whacked margins, and has apparently come up against broader economic headwinds that have hit sales.” He also reiterated his belief that discounting is “really killing retailers”.