Gear4Music PLC shares dropped on Friday as it lowered its annual guidance amid the cost of living crisis and hot summer.
Shares in the York-based online musical instruments and equipment retailer were down 14% to 114.00 pence each in London early Friday.
Gear4Music said that it achieved sales growth during its first quarter of its financial year to March 31, 2023.
However, it noted that sales in July and August have been hampered by the cost of living crisis and hot weather across Europe.
The company explained that it expects to return to a more normalised seasonal trading pattern during the financial year and early indications suggest that sales have improved during September.
Looking ahead, Gear4Music said that it now expects revenue in financial year 2023 to be around £155 million and earnings before interest, tax, depreciation and amortisation of around £9 million.
This is lower compared to the current consensus market expectations, which anticipates revenue of £163.9 million and Ebitda of £11.9 million.
The company said that whilst it has lowered full year expectations, it remains well funded and profitable, and is confident in its medium and long term growth strategy.
‘Our pipeline of growth orientated projects, including AV.com, continues to make good progress, and we are seeing strong results following last year’s investment into our new European distribution hubs,’ it added.
Gear4Music plans to release a trading update for the six-month period ended September 30 on October 20, followed by half year results for the period on November 15.
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