The retailer told the City that it expects pre-tax profits for the year to come in between£32 million and£36 million, lower than the mid-£40 million market consensus.
Chairman Roger Lane-Smith admitted being disappointed at the group's trading for the 22 weeks to January 1, but was optimistic that JJB would do better in the coming financial year.
He said: 'Our performance has been hampered by strong retail competition in clothing and footwear and I expect these conditions to continue for some time. However, JJB remains focused on the sale of quality sports-related products in its increasing number of superstores.'
JJB plans to open 18 superstores this year, some of which will incorporate health clubs. The retailer is moving off the high street and focusing on retail park outlets. It has closed 26 stores in the past year.
Numis retail analyst Steve Davies said: 'The company has realised that it needs to be more competitive on price in order to stand up against Sports World. This has given sales a bit of a boost - with like-for-likes down 0.4 per cent in the 22 weeks to January 1 - but has decimated gross margins, which are down 320 basis points across the group.'
The World Cup in Germany this year should give JJB a massive sales opportunity. However, Davies warned: 'JJB managed to produce a profit warning in the wake of Euro 2004, so any upside from a major football tournament is far from guaranteed.'
No comments yet