Leading UK sports chain JJB Sports on Thursday issuing a profit warning and said it expected tough trading conditions for the next two years, an announcement that sent its shares into freefall.

The retailer had been expected to enjoy a World Cup boom amid surging sales of kits and merchandise, but JJB said while that had been the case it had impacted on higher-margin branded clothes.

In a statement, JJB said total sales for the 23 weeks to July 7 climbed five per cent compared to the year-ago period and just one per cent on a like-for-like basis amid sliding margins.

Chairman David Whelan said: "I believe nevertheless that JJB has performed satisfactorily in a very competitive clothing market and that JJB will continue to generate growth in the second half of the year."

The city had been expecting JJB to post a £122 million pre-tax profit in the year to January 2003 after it made £97.5m last year. Its shares plunged by more than a quarter in early trading today.