- Tortilla forecasts adjusted pre-nasties profits of £4.5-£4.6m this year
- The company's expected turnover of £69.8m is 'slightly behind' analyst expectations
- Bosses blame the dampened sales outlook on weaker consumer confidence
Shares in Tortilla Mexican Grill fell on Wednesday after the restaurant group issued a profit warning.
Britain's largest Mexican fast-casual restaurant chain forecasts adjusted pre-nasties profits of £4.5m to £4.6m this year, up from £5m as previously expected.
Tortilla also expects sales to rise 13.8 percent to £65.7 million in 2023, 'slightly behind' analyst forecasts of £69.8 million, driven by new branch openings and positive like-for-like growth in the UK Kingdom.
Price drop: Shares of Tortilla Mexican Grill fell on Wednesday after a profit warning
Bosses blame the dampened sales expectations on weaker consumer confidence, which has hit sales in the hospitality sector, especially in recent months.
Sales were further impacted by lower footfall at high street outlets and in 'smaller tertiary towns and villages' where the company has less brand awareness.
It expects cost of living problems affecting the hospitality sector to continue until 2024, especially outside London.
After the trading update Tortilla Mexican Grill Stocks fell 9.8 percent, or 5.4 cents, to 49.6 cents by mid-afternoon, meaning their value has fallen 42 percent since the start of the year.
But despite the bleak outlook, the company revealed that its UAE-based business had achieved a record year.
Tortilla also said its franchise deals with catering giant Compass Group and Upper Crust owner SSP Group had performed “extremely well”.
The company plans to open a further four locations with SSP next year and has a significant pipeline of restaurants in 'high-traffic locations in city centers and shopping centres'.
Richard Morris, CEO of Tortilla, said: “As a management team, we are taking proactive actions to adapt to the changing market environment.
“We know we perform better in the booming dining markets where the Tortilla brand is known. We have a strong portfolio of new locations in high-quality locations and additional opportunities for franchise growth.”
Tortilla was founded in 2007 by California-born Brandon Stephens after becoming frustrated with the absence of Mexican restaurants in the British capital.
The AIM-listed company now has 87 branches across the British Isles and the Middle East, including 18 franchises, and served more than 6.5 million meals last year.
When the group announced plans for an initial public offering two years ago, it said it wanted to launch 45 new sites over the next five years.