Top sportswear retailer JJB Sports has issued an annual profit warning after being forced to engage in aggressive promotional activity.

JJB, currently the UK's biggest sports chain, said it had been "operating a vigorous promotional campaign since October 2005" to deal with the competitive retail environment.

This, JJB said, led to a better revenue result than in the first half of the year, but meant a lower gross margin.

However, the company said it had enjoyed a pick-up in revenue driven by Christmas and New Year sales.

The company now expects pre-tax profits for the year ended in January to drop to between GBP32m and GBP36m.Previous analyst forecasts had suggested profit would total between GBP40m and GBP42m.

Underlying pre-tax profit for the year ended in January 2005 totalled GBP63.3m.

Revenues for the 22 weeks ended 1 January rose 2.3% from last year, but same-store sales fell 0.4%. Revenue by product category showed slight growth in all areas apart from footwear.

Chairman Roger Lane-Smith said: "I am disappointed with the Company's trading performance for the 22 weeks ended 1 January 2006.

"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…with membership of our health clubs increasing, I expect further growth in this area.

"Despite the challenging trading environment, with these contributors to our full year profits, as well as potential benefits from the 2006 sports calendar such as the FIFA World Cup in June, I believe that JJB will achieve a better performance in the coming financial year than that achieved in the current year."