Shares in Whitbread have dropped nearly 5% after the pubs and hotels group warned of tough trading conditions as consumers tighten their purse strings.
Costa Coffee is one of Whitbread's many brands
Like-for-like sales growth across the group has slowed in the new year, particularly at its pub-restaurants and David Lloyd Leisure clubs, it said.
Pre-tax profits for the year to 3 March, meanwhile, rose 17.8% to £249.4m ($473.9m), from £211.7m a year earlier.
Its Premier Travel Inn, TGI Friday's and Costa Coffee chains performed well.
However, total membership of its health clubs fell 2.3% during the year as competition intensified and consumer confidence began to sag.
"Sales in the first half of 2005/06 will reflect the lower opening member numbers, although we expect to rebuild membership as the year progresses," the company said.
Despite the disappointing health club figures, Whitbread said total group sales growth in the first seven weeks remained strong mainly because of a strong performance from the Premier Travel Inn chain.
The Premier Travel Inn division lifted sales from £230m to £323m and operating profits by 47% to £109m. The figures included the first contribution from the newly-integrated Premier Lodge hotels, which it bought in July.
Sales at Whitbread's pub-restaurants, which include the Beefeater and Brewsters chains, rose 1.1% to £597m, but operating profit fell by 7.3%.
The company said it was integrating most of its remaining Brewsters restaurants into its more successful Brewers Fayre model.
Last month, Whitbread announced plans to raise over £1bn from the sale of its Marriott luxury hotels.
"We expect to realise £1.3bn through the sale of Marriott Hotels and other assets that are not core to our strategy," said Alan Parker, chief executive.
"We will make a significant return of cash to our shareholders and reduce both our debt and our pension fund deficit."
But shareholders reacted negatively to Whitbread's new year sales figures, sending its share price down 44.5 pence to 873.5p by the close of trade on Tuesday.
"Strong results from their Premier Travel Inns failed to offset weakness in their pub-restaurants and David Lloyd Leisure clubs," said analyst Matthew Gerard at Investec Securities.