As a consequence of disappointing sales trends, the Blacks Leisure board now expects half-year results to be broadly at break-even level.
Total group retail sales rose by 2.7 per cent over the period and the group expects second-half profits to be generally in line with the second half last year.
Like-for-like sales at the Blacks retail unit have risen by 4.1 per cent and the gross margin has increased. Combined, the chain's Freespirit and O'Neill brands have also achieved a 3.5 per cent improvement in like-for-like sales, with a rise in gross margins.
But like-for-like sales at Millets outlets plummeted by 5.6 per cent, with a small drop in gross margin. The group said the fall in sales was down to unusually weak camping sales. The dip in gross margin reflected investment in price competitiveness.
Investec analyst Mark Charnock said: 'Blacks ought to be in a position to exploit its market-leading position, but it needs to move swiftly in Millets, its biggest business, to address product and pricing issues. The business is not broken, but is perhaps more exposed to competition in some areas, from non-specialists, than had previously been thought.'
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