Dobbies Garden Centres saw turnover rise from £136.3 million to £137.4m in the year to February 28, helped by one new store opening, while profits fell from £10.5m to £7.3m, according to newly released figures.
Owners Tesco recently opened Tesco-Dobbies stores in Inverness and Kings Lynn, and has plans for another in East Kilbride.
Dobbies blamed the wet summer of 2012 for the results. Gross margin fell from 51.3 per cent to 49.9 per cent because of promotional activity and a "better value proposition for customers".
A Dobbies representative said: "Investment has remained a key focus for us - we recently invested in our first two co-joined centres with Tesco, and we are currently working through the early planning process for other sites. The company reacted to this by continuing to diversify and differentiate its product range and offering strong promotions to customers. The company continued to invest in central systems and resources and new stores."
The first garden centre fresh fish counter, in the Dobbies at Braehead, near Glasgow, opened in November.
Garden centre executive Andy King took over from James Barnes as managing director in September, while a Tesco secondee, Max Britten, is interim finance director, replacing Sharon Brown.