The firm said it had been facing a competitive corporate travel sector and higher wages, among other issues.
Pre-tax profit could fall to between 355m-365m Australian dollars ($274m-$282m; Â£174m-Â£179m) for the year to June, it said.
The mid-point would mark a fall of 4.4% from a year earlier.
Flight Centre said, however, that it would report "solid growth" in its overseas operations, and a record year-end cash balance in excess of A$500m.
The travel group has operations in 11 countries including in the UK, the US, Singapore and South Africa.
Flight Centre said its consultants had cut prices to attract "cautious leisure consumers" in 2014 in order to boost sales.
The group said it had also faced competitive pricing in the corporate sector amid a downturn in Australia's mining industry.
An increase in consultant's wages that was implemented in Australia in August last year had also increased costs for the firm by A$12m, it said.
But Melbourne-based market analyst Evan Lucas told the BBC the firm had lost its edge.
"Double downgrades will always hit your share price," he said, "and this is their second downgrade this financial year.
"The concern is the collapse in corporate and leisure travel - this is a top-line revenue issue - while wage growth is a bottom-line concern.
"FLT [Flight Centre Travel Group] has lost its edge as competition ramps up -  it has work to do," he said.
Flight Centre's managing director Graham Turner said the firm's Australian business would "not achieve its normal growth trajectory" for the period and noted that consumer confidence in Australia had fallen last year after a disappointing budget.
However, he said the firm was seeing "strong demand and sales to the USA" which he said looked set to continue.
Australia's biggest travel agency, Flight Centre, has issued its second profit warning in six months, sending its Sydney-listed shares down 13.6%.