Retailer’s full-year profits are expected to fall below expectations, as it issues a profit warning for the third time this year.

The department store blamed “increased competitor discounting and weakness in key markets” for the profit shortfall. It said pre-tax profits for the full year would come in between £35m and £40m, below estimates of £50.3m.

Debenhams’ latest profit warning comes despite a turnaround plan designed to cut costs and boost sales. Shares in the retailer fell as much as 16% in early trading before recovering slightly.

Chief executive Sergio Bucher pointed to “exceptionally difficult times in UK retail”, adding: “We don’t see these conditions changing in the near future.”

Debenhams said sales had fallen in May and June thanks to rivals’ discounting and weak consumer spending.

Like-for-like sales, which reflect sales at stores open for more than a year, fell by 1.7% in the 15 weeks to 16th June. Digital sales grew 16% over the same period.

Sergio, who joined Debenhams in 2016, has launched a turnaround plan, putting more emphasis on food and beauty and less on fashion, limiting promotions and improving the firm’s online platform.

However, in January the chain warned profits would be lower this year after a disappointing Christmas trading period.

In April, its chief financial officer left as the retailer warned that the cold weather in late February, known as “the Beast from the East”, would eat further into profits.