Irish-Swiss bakery goods maker Aryzta has warned its earnings could fall by up to 20% this year as its Otis Spunkmeyer cakes and cookies failed to sell as much as hoped.
The news wiped more than a third off the value of its shares in Dublin today.
Aryzta, known for its Cuisine de France range, said falling revenues and increased labour costs in its biggest market, North America, were compounded by uncertainty in the wake of Britain's vote to leave the European Union.
It was also facing costs related to shifting production at a German factory.
"The performance in the current period is both unexpected and extremely disappointing," the company's chief executive Owen Killian said in today's trading update.
Shares in Aryzta, which has its roots as an Irish agricultural company IAWS and is listed on the Dublin stock exchange, fell over 30% to the lowest level in almost eight years.
Aryzta began expanding the Otis Spunkmeyer brand, acquired in 2006, when it bought the Cloverhill factory in 2014, with the aim to sell directly to retail customers.
But it said it has lost contracts to manufacture products for other companies that compete with Otis Spunkmeyer.
Aryzta, which supplies baked goods to stores and fast food restaurants worldwide, said it anticipated an improvement in margins in North America in the second half of its financial year, driven by price increases.
"The pipeline is strong, we are not losing our customers," Killian said.
