JJB Sports has issued a cautious outlook for 2008 in a trade update that suggested second-half profits had fallen, despite a 1.2% increase in retail revenues.

Same-store sales for the 23 weeks to 6 January 2008 at retail stores only (excluding health clubs), increased 1.9% across 384 stores, the company said.

Its total revenue for the Christmas period of six weeks to 6 January 2008 showed an increase of 2.5%, which included a similar increase in same-store revenue.

However, JJB reported lower combined gross margin results over Christmas as it cleared non-current products from stores to make space for newer stock.

"JJB is determined to start its new financial year from February 2008 with a much fresher stock package on which stronger margins can be achieved," the company said.

The company's second-half trading is expected to be similar to the comparative period last year, with the aggressive stock clearance to continue over the remaining three weeks of the current accounting period.

Its board expects this to result in slightly lower profit before tax and exceptional operating items for the second half, than the GBP27.4m (US$53.7m) reported in the second half of last year.

In its outlook, the company said it believes it will be in a stronger position in 2008 as regards its product levels and ranges.

It is also looking to implement a refurbishment plan across selected stores, taking advantage of a new in-store format shown at its Trafford Centre store.

JJB also said it would continue with an extensive roll-out programme of its combined health clubs/superstores, but was cautious about trading in the year ahead.

"The board of JJB remains cautious about the outlook for 2008 in view of the escalating pressure on consumers' finances," a statement added.

JJB will make its preliminary results announcement for the 52 weeks ending 27 January 2008 on 16 April.