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Department store owner Myer's full year net profit has fallen 8.7% to $127.2 million.
The result followed higher selling expenses. Sales revenue for the year grew nearly 1% to $3.14 billion.
The company declared a final dividend of 8 cents a share, fully-franked, down on last year's 9 cents.
The company said its cost of doing business had increased by 3.1% to $1.01 billion.
Myer chief executive Bernie Brookes said net profit had been affected by cost pressures associated with labour and occupancy (utilities, rates and taxes).
Other effects included planned investment in growth initiatives including omni-channel and Myer Exclusive Brands, escalating depreciation charges associated with previous capital investments and the significant refurbishments of three of its top 20 stores.
"We remain cautious about the year ahead given the challenges of the economic outlook and consumer confidence," he said.
Costs of doing business were expected to grow another 4% to 5%, offsetting the benefits of sales growth and three new stores opening.
"As we move into fiscal year 2015 we expect to benefit from improved operating leverage and stronger fundamentals as a result of the completion of major refurbishments, the online business becoming profitable, and the ongoing optimisation of our store network," the company said.
Invast chief market analyst Peter Esho said Myer would struggle to maintain its dividend and attractiveness to investors until its earnings grew. Overall, there was not enough good news in the results to help offset the overarching challenges, he said.
"For Myer, revenue continues to be the major problem," he said. Guidance for 2014 was fairly downbeat with sales sluggish and the cost of doing business to rise.
"For Myer to grow its revenue and maintain its earnings it needs to continue investing in its stores so shoppers flow through ... this comes at a cash cost."
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