Speciality baker Aryzta reduced its profit outlook on Thursday after recovery plans of its new-look management team were dented by renewed weakness in Europe, its biggest market.
Shares in Aryzta, brands of which include Otis Spunkmeyer and Cuisine de France, tumbled by 28 percent to a record low of 14.85 Swiss francs at 0732 GMT, taking year-to-date losses to 60 percent.
"While we have made a solid progress in what is a multi-year turnaround programme, we have clearly underestimated the extent of the challenges and the time required to address those challenges," chief executive Kevin Toland, who started last September, said in conference call with analysts.
The Swiss-Irish company said it expects full-year earnings before interest, tax, depreciation and amortisation (EBITDA) to be 9-12 percent lower than the reduced guidance it issued in January.
"Failed To Deliver"
"Yet again, Aryzta has failed to deliver on ever-lower targets," said Investec analyst Ian Hunter, adding that the main reason for the outlook cut appears to be renewed weakness in Europe, where he thought there had been signs of recovery.
The company cited rising distribution and labour costs in North America, high butter prices and weak consumer spending in some European markets, particularly the UK.
Aryzta said its EBITDA margin in the third quarter came in below management expectations.
The company reported a 16.8 percent drop in third-quarter revenue to 811.4 million euros, mainly because of disposals and currency effects.
Arytza also announced a three-year restructuring plan, to be implemented immediately, which it expects to deliver a cumulative 200 million euros in cost savings over three years.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
