Pre-tax profits fell to £5m for the year to 31 January from £8.9m the previous year, as losses widened at its flagship UK stores.
The retailer's UK retail division reported a loss of £8.2m after cutting margins to maintain sales.
French Connection said its UK retail operations had been "disappointing".
"During the past year our wholesale, international and licensing businesses have performed well," said chairman and chief executive Stephen Marks.
"However in the most difficult winter season I have seen in all the years I have been in business, our UK retail division has been very disappointing and this has had a significant effect on our results for the year."
The company said its review would focus improving sales and profit margins in what it described as its "core" UK retail business.
It said the poor performance was down to the state of the UK economy, high cotton prices and its own "disappointing" comparative performance.
In the year to 31 January, its UK High Street stores contributed £111m to total revenue of £215.4m.
However, the firm's profits were driven by its wholesale and licensing operations in the UK, North America and Hong Kong.
French Connection's UK wholesale operation made an operating profit of £6.1m during the period.