November 28, 2018 / 10:30 AM / 17 days ago

Cuts to forecast leave a sour taste for Vapiano investors

* Vapiano lowers sales forecast to 375-385 mln euros

* Also cuts EBITDA guidance to 34-38 mln euros

* Forecast for new restaurant openings revised down

BERLIN, Nov 28 (Reuters) - Shares in German-owned restaurant chain Vapiano fell a further 10 percent on Wednesday after the company cut its sales and earnings outlook for the second time in as many quarters, and trimmed the number of planned new openings.

Listed on the Frankfurt Stock Exchange last year, Vapiano positions itself in the expanding “fast-casual” dining segment, between chains such as McDonald’s and Burger King and more formal, full-service restaurants.

Vapiano blamed a decline in like-for-like sales in its core European markets outside its home market of Germany and the slower progress of some of its new restaurants for the cut to its sales and profit guidance. The company now forecasts annual sales to rise to between 375 million and 385 million euros ($423-$434 million), compared to its previous forecast in September for sales of 385 million to 400 million euros.

It also lowered its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) guidance to between 34 to 38 million euros. It had previously forecast EBITDA of 42 to 47 million euros.

The stock, which has shed over 60 percent of its value since it cut its sales and earnings growth targets at the start of September, fell as much as 10.6 percent on Wednesday to 6.81 euros by 1025 GMT, less than a third of the price it listed at last year.

Chief Executive Jochen Halfmann described the last two quarters as challenging for the company. Vapiano had launched a plan to increase profitability in the short and medium term on top of its turnaround programme in Sweden, he added.

Vapiano also lowered its forecast for new restaurant openings to between 32 and 34 from 33 to 38.

Jefferies analyst Rebecca Lane said the cut in guidance for store openings this year was “particularly damaging” considering the roll-out programme is central to Vapiano’s growth strategy.

“(It) may result in investors questioning the feasibility of management targets for store openings looking further out,” said Lane, who rates the stock ‘hold.’

Vapiano opened 18 restaurants worldwide in the first nine month of the year, to bring the total number to 220 in 33 countries at the end of September.

Adjusted EBITDA fell 18.1 percent in the third quarter to 8.6 million euros. Like-for-like group sales were down 1.9 percent. ($1 = 0.8868 euros) (Reporting by Caroline Copley Editing by Emma Thomasson/Keith Weir)

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