The profit warning unsettled investors

Despite like-for-like sales over the festive period rising by 2.2%, this was a slower increase than the 3.5% seen over the full six months to 1 January.

As a result, the company said annual results for its financial year to 29 January would be below expectations.

Profits are set to be above �7m ($13m), but less than the predicted �8.9m.

Sales would be �2.5m below expectations, it said.

Ottakar's, which has 131 outlets, announced pre-tax profits of �6.1m last year.

'Unsettling'

Chairman Philip Dunne said the prospects for the company remained strong, but that the festive season had been slow to get going.

Clearly the trading statement has rattled a lot of people Nick Bubb, Evolution Securities See Ottakar's share price

"Christmas came relatively late this year for Ottakar's, in common with several other retailers," he said.

Analysts said the profits warning was troubling.

"It is disappointing that although like-for-like sales are continuing to grow, profits are down," said Nick Bubb, retail analyst at Evolution Securities.

"Clearly the trading statement has rattled a lot of people.

"Ottakar's has expanded pretty quickly and has quite a bit of debt, so it is a bit unsettling."