Martha Stewart has denied all charges

Profits at Martha Stewart Living Omnimedia, which trades on Ms Stewart's reputation as a tasteful homemaker, fell by 86% during the April to June period.

The retail and media firm also admitted that things were unlikely to pick-up until after the trial, which is set to take place in January.

Shares in the firm fell more than 4% in morning trade as the company forecast that it would end up in the red during the year as a whole.

The company, which publishes Martha Stewart Living magazine and sells a line of home products, reported a second-quarter net profit of just $931,000, compared with $6.7m in the same three months a year earlier.

Charged

Ms Stewart was charged in June with securities fraud and obstruction of justice in relation to trading in shares of biotech firm ImClone.

She has strongly denied the charges, and vowed to clear her name.

Ms Stewart sold ImClone shares the day before regulators rejected the company's application to market the cancer drug Erbitux.

The accusation is that she was acting on a tip-off from her friend, ImClone founder Sam Waksal, who has already admitted charges of securities fraud.

Mr Waksal was sentenced last week to more than seven years in prison.