JJB Sports yesterday counted the cost of fierce competition after a World Cup sales lift failed to lead to stronger half-year profits.
The company posted a 12 per cent rise in revenues to £381.6 million for the six months to July 30 while pre-tax profits came in at £18.2 million, broadly flat on last year but higher than analysts forecasts.
Revenues from replica kit at the time of the football tournament in Germany was around £14.1 million higher than the same period last year, JJB said.
Chairman Roger Lane-Smith said: "Although we are encouraged by the revenue improvement and the marginal increase in pretax profit, difficult trading conditions continue to challenge the margin.
"This is most evident in the sale of replica kit where the World Cup boosted sales, but these sales were subject to intense competition on pricing."
Mr Lane-Smith said JJB was focusing on its Serious About Sport strategy to differentiate itself from other retailers and was also improving the quality of its stores and products.
He went on: "Looking forward, the latest trading results give us confidence for a satisfactory outcome to the current accounting period. However, the retail sector continues to be highly competitive and Christmas will be an important trading period for us."
During the 11 weeks to October 15, like-for-like revenues increased by nine per cent, the firm said. The figure over the half-year showed a 9.5 per cent improvement.
In its leisure club division, JJB said both profitability and membership had increased by 34 per cent in the last 12 months.
JJB operates 439 stores, including almost 200 out-of-town superstores, and more than 100 large high street stores and 135 smaller shops It also has 37 health clubs, including six with indoor football centres.
Mark Charnock, an analyst at Investec, said the encouraging start to the second half gave scope to raise forecasts by between £1 million and £2 million.
"If JJB can change customer perceptions through more aggressive pricing coupled with more exclusive product, we believe it can begin to roll back the sales declines of the last three years," he said.
The group said it would pay an interim dividend of 3 pence per share. Shares closed up 3.25p at 198.
