Shares in Mexican restaurant chain Tortilla tumbled today as it revealed its high-street locations were struggling amid low footfall.
Revenue for 2023 is expected to be £65.7 million, up from last year but slightly below expectations. This, it said was mostly due to “subdued consumer confidence impacting demand across the eating out market”, especially at the end of the year.
The business added: “The Group's London sites, where Tortilla enjoys stronger levels of brand awareness, shopping centres and travel locations have continued to perform particularly well. However high streets have been impacted by lower footfall over the past few months and sales have been impacted here and in smaller tertiary cities and towns where the brand awareness is lower.”
Management has taken steps to cut costs, but says most of the impact will be felt next year.
Underlying profits for the year are expected to be between £4.5 million and £4.6 million.
CEO Richard Morris said: “During 2023 Tortilla has made important strategic progress. We have continued to open new sites in line with our long-term growth strategy, increased like-for-like sales, and implemented several initiatives to enhance profitability during H2.”
“As a management team we are taking proactive actions to adapt to the changing market environment. We know that in buoyant eating out markets where the Tortilla brand is well known, we outperform. We have a strong portfolio of new sites in high quality locations as well as additional franchise growth opportunities. In addition, we intend to increase marketing investment to improve broader consumer awareness of our brand and fresh, value for money proposition whilst also taking action to optimise the profitability and long-term potential of our delivery channel.”
“We remain as confident and excited as ever about Tortilla's long-term and sizable profitable growth opportunities both in the UK and internationally.”
The shares fell by 9% to 50p, leaving them down 41.2% for the year to date and down 74% since the company floated in 2021.
