The Warehouse has blamed large restructuring costs and asset writedowns for a drop in profit of almost three quarters, and is warning of more costs to come.
The retailer has made a net profit of $20.4 million for the year ended July, compared with $78.3m the year before.
Group sales were up 2 percent to $2.98 billion, but performance across its various brands was mixed, as it was hurt by tough competition, squeezed margins, a late start to winter, and a loss-making consumer finance business.
"It is encouraging that our second-half retail performance delivered 13.9 percent growth in adjusted net profit after tax despite the internal distractions during this period of transition," chief executive Nick Grayston said.
The operating profit for the big-format Red Sheds was down 5 percent, but the Blue Shop stationery chain and the Noel Leeming electronics shops had solid profit gains, while the Torpedo 7 clothing chain also had an earnings dip. Online sales grew 7 percent.
The Warehouse has cut costs by restructuring, axing jobs and selling its finance business, which cost it a total of $42m.
Leaving aside the one-off costs, the adjusted profit was $59m, just above a forecast made by the company.
Mr Grayston said there would be further costs as The Warehouse updated its IT systems, changed the range of stock it sells and refined a low-cost marketing plan, but the changes would improve the group's performance over the next few years.
"As in previous years, the earnings outlook for FY18 (2018) will be dependent on the critical Christmas trading period. The
transformation programme introduces additional elements and uncertainty into our forecasts."
It has paid a final dividend of 6 cents a share, taking the full year payout to 16 cps - the same as last year.
The Warehouse has 250 stores under its four brands, but is experimenting with putting the stationery stores within the Red Sheds and is also looking to beef up its online sales.
The company has been singled out as one likely to feel competitive pressures when online retail giant Amazon starts operating out of Melbourne later this year.