---ADDS BROKER DOWNGRADE, SHARE PRICE---
Shares in discounter Poundland (LON:PLND) tumbled 11% after it said annual profits were likely to be at the low end of hopes as tough High Street trading continued.
Poundland, which has taken over rival 99p Stores, said profits in the year to March 2016 were set to be at the lower end of a range of between is £39.8mln to £45.8mln.
The market consensus was for pre-tax profits of £42.6mln. Poundland said Total sales in the third quarter increased by 29.4%, which excluded its Spanish business but included 99p Stores.
Total constant currency sales rose 30.1% excluding Spain but including 99p Stores.
Within that, Poundland contributed nine percentage points, including three percentage points from converted 99p Stores, whilst the acquired 99p Stores' trading throughout the period under their own fascia contributed 21.1 percentage points.
The group said at its half-year results in November that trading had been highly volatile in the third quarter and performance depended on the last six weeks' trading towards Christmas.
Chief executive Jim McCarthy said the chain's Christmas and Halloween ranges were its best ever.
But he added: "The trading conditions we experienced in November continued through the third quarter, with high street customer numbers down year on year and this has impacted sales growth."
The stock, down 50% in the last year, was changing hands for 170.7p, for a fall 21.2p.
The shares have been hit as competition on the High Street and particularly in the discount sector has heated up.
Heavyweight broker JP Morgan weighed in with profit and price target downgrades in the wake of the earnings alert.
Before the warning brokers expected Poundland to post pre-tax profits of between £39.8-£45.8mln.
It has cut to £40.5mln, which falls to £30mln if the losses of 99p Store are included in the calculation.
Its valuation comes back from a punchy 350p a share to 300p. Its recommendation remains ‘overweight’.