Weak sales and a stronger Australian dollar have led Billabong International Ltd (ASX:BBG) to cut its profit forecasts.

The surfwear retailer today said its 2011 first half net profit is expected to be 8 to 13 per cent lower than the same time last year.

First half earnings before interest and tax are also forecast to slump by around 25 per cent in constant currency terms in the period.

Full year net profit guidance has been slashed from the previously forecast amount of 2 to 8 percent growth.

"This full year earnings guidance reflects an expected EBIT result in constant currency terms of approximately 10 per cent below the prior year, higher interest costs and a significantly lower effective tax rate," Billabong said in the statement.

"It should be noted that this guidance reflects the inclusion of significant one-off acquisition transaction and restructuring costs of approximately $11.0 million post tax.

"However, offsetting these costs are expected one-off tax benefits of approximately $12.5 million."

The news sent Billabong's shares tumbling as much as 94 cents, or 10.5 per cent, to $7.95 in early trade.