British supermarket chain Sainsbury's confirmed fears of weaker-than-expected first-half profit today after a recent analyst downgrade sparked an investigation by regulators.
Sainsbury said underlying pre-tax profit for the six months to October 9th would be between £125 million sterling and £135 million.
The firm said in July that its full-year profit would be significantly below the market consensus at that time, leading analysts to slash their forecasts.
But some did not reduce their numbers enough, and investment bank Merrill Lynch cut its first-half profit forecast on Friday for the second time in five days, following a conversation with the company.
This sparked a call from Britain's financial regulator, the Financial Services Authority, which was concerned about potential selective disclosure of information.
The statement comes as Britain's third-biggest grocer struggles to compete with cut-price competition from larger rivals Tesco and Wal-Mart's Asda and could heighten recent speculation of a bid for the firm.
Sainsbury shares, which have underperformed the UK food retailing sector by about 21 per cent so far this year, recouped earlier losses to trade 0.4 per cent lower at 251 pence.