Sportswear retailer JJB Sports has reported a rise in Christmas and New Year sales but warned that annual profits would fail to meet forecasts.
Despite a challenging Christmas JJB looks forward to a stronger 2006
JJB cut prices to boost festive trade, but it said the higher sales over the festive period "more than compensated".
Like-for-like revenues for the six weeks ended 1 January were up 2%.
However, lower profit margins on sales mean annual profits are now set to be between £32m and £36m, lower than earlier forecasts of £40m to £45m.
JJB says the retail environment has been very competitive, particularly in clothing and footwear. One of its rivals - Allsports - went into administration in September.
"I am disappointed with the company's trading performance for the 22 weeks ended 1 January, 2006," said chairman Roger Lane-Smith.
Looking ahead, JJB was more upbeat and plans to open more combined health clubs/superstores.
The FIFA World Cup in June should also bring in more revenues.
"I believe that JJB will achieve a better performance in the coming financial year than that achieved in the current year," said Roger Lane-Smith.