Like-for-like sales at the outdoor group were up 2.8% for the six weeks to January 12, with total sales up 2%, driven by its Blacks and Millets chains, which were up 5.4% and 7.8% like-for-like respectively.
However, the boardsports division dragged the overall figures down after poor performances from the Freespirit and O'Neill businesses with like-for-like sales down 10.8% over the six week period.
A statement from the company said: "The boardwear brands have experienced declining sales for most of the second half reflecting the effects of a weak clothing market. As a consequence, operating profits for the group for the full year, whilst ahead of last year, are likely to be below market estimates."
The company said it was planning to shave £3 million off its cost base in the next financial year. It will adjust staffing levels at its stores to meet peak demand times, test new store formats in March 08 and streamline its supply base and range offer.
Chief executive Neil Gillis said he anticipated a tough market in 2008 but said that recovery would be seen 2009. He said: "It is our intention to create year-on-year profit growth though efficiency gains and cost base reduction. The retailing initiatives we are testing in 2008 will form the basis of our plan for the sales led recovery of the business from 2009 onwards."