JJB Sports, the high street sports retailer, announced today that profits for the second half of the year will be lower than 12 months ago.
It revealed to the stock exchange today that figures will be 'slightly below' the £27.4 million achieved over the same period last year.
Although it reported a 2.5 per cent increase in revenue for the Christmas period, the growth was achieved through "aggressive" clearance of older products which has impacted the sports company's bottom line. It is the second profit warning in six months.
Roger Lane-Smith, non-executive chairman of JJB, today reiterated his faith in the company: "I am confident that under the direction of chief executive Chris Ronnie, the whole executive team is taking all the right actions to reinvigorate this business."
The statement also said the board expects the merchant's position to be "strengthened following the recent introduction of a significant retail staff incentivisation bonus".
"JJB will also continue with the extensive roll-out programme of its combined health clubs/superstores," the company added.
The statement also said the decision to cut prices is only partly a result of the current concerns about consumers' finances, but that it "remains cautious" over the outlook for 2008.
The chief executive said that the UK's second largest sports retailer is "certainly looking for a profit increase in 2008" in a conference with journalists today.
On word of the news, the sports retailer and health club operator's share price has fallen by one per cent to 99p in early trading today.