Outdoor clothing specialist Blacks Leisure has issued its second profit alert in five weeks - prompting analysts to suggest the business could be subject to "predatory" interest.
Blacks said like-for-like sales at its 240 Millets stores were down 5.6 per cent in the first half because of "unusually weak camping and related equipment sales".
The firm, which also owns the Blacks, O'Neill and Freespirit chains, said it expected to break even in the six months to August 31.
The news saw shares end down 79.5p at 372.5p.
It made profits of £6.9 million in the first half last year.
Millets was also hit by a fall in margins as it faced a price war with rivals.
The declining sales of camping kit at Millets - which it has been blamed on the World Cup and the lack of a Glastonbury Festival - sent group like-for-like sales down 0.4 per cent for the year so far.
It marked an improvement on the 4.4 per cent fall this time last year, but was not enough to save its profits forecast, which last month it said would be below last year's level.
Yesterday the company downgraded it further and said: "Given the continuation of these disappointing sales trends, the board of directors now expect the half year result to be broadly at break-even level."
Blacks added it expected a pick-up later in the year and forecast second half profits "to be broadly in line with the second half last year" when it made £14.5 million.
Richard Ratner, analyst at Seymour Pierce said: "The second profit warning in just over a month leaves the management with a huge credibility issue.
"However, Blacks Leisure is the market leader in the out-door field and could well attract predatory interest."
He cut his current year profit forecast in line with the company's guidance and slashed his year to the end of February 2008 forecast from £24.8 million to £17.5 million.
He also downgraded his investment recommendation from "outperform" to "hold".
Analysts at Numis believe there is a "decent possibility" the profit warning may rekindle private equity interest in the company. They reckon a b id of around 450p, or £189 million, "looks plausible".
As well as its Millets stores, the company has 101 Blacks Outdoor branches, including seven out-of-town sites. In boardwear, Freespirit now operates from 47 stores with 15 O'Neill outlets.
The retailer said like-for-like sales at Blacks were up 4.1 per cent while Freespirit and O'Neill saw like-for-like sales rise 3.5 per cent.
Blacks' expectations for the second half to the end of February 2007 are for profits to be broadly in line with the second half last year.
This implies a year to end of February pretax profit of just £14.5 million, down 32 per cent from £21.4 million and compared to analysts' hopes of about £22 million.
The group's previous trading update, issued ahead of its annual shareholders' meeting on July 19, had merely flagged that first half pretax profit would fall short of last year's outturn of £6.9 million.
Blacks will announce interim results on October 26.