The Works reported a dip in first-half sales on Thursday but said it was on track to meet full-year profit guidance.
In an update for the 26 weeks to 2 November, the retailer said total sales edged down 0.3% on the year to £123.8m, while total like-for-like sales were up 0.3%.
Store LFLs rose 4%, continuing to outperform the wider market. The company said this reflected the ongoing delivery of its 'Elevating The Works' strategy.
"Although the consumer environment has remained challenging, more customer-focussed marketing campaigns and new ranges resonated well with our customers," it said.
In addition, the store performance was helped by improved operational standards and early successes from the group's space optimisation initiative.
Online sales - which make up less than 10% of total sales - fell 36%, reflecting the impact of operational challenges following the transition to a new third-party fulfilment partner.
The Works said it was "well positioned to optimise store sales" during the peak trading period. This, along with sustained product margin growth and ongoing cost saving action, means it's on track to deliver FY26 profit in line with market expectations of pre-IFRS 16 adjusted EBITDA of £11.0m.
Chief executive Gavin Peck said: "We are pleased with the progress made in the first half of FY26, having delivered a number of important strategic initiatives, a strong performance in-store and ongoing margin growth.
"Our focus on delivering screen-free activities for the whole family is resonating with customers and, notwithstanding the challenging retail backdrop and ongoing online capacity constraints, we are on track to deliver further strategic and financial progress in the remainder of the financial year and beyond."
At 0915 GMT, the shares were down 4.5% at 39.06p.