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Shares in Oliver's Real Food (ASX: OLI) have plummeted by almost 60 per cent after the company issued an earnings warning on Wednesday.
The company, which runs a series of healthy fast food outlets, reduced its EBITDA forecast by nearly $1.5 million, blaming lower than forecasted Easter sales, underperforming new stores, delayed opening dates and unforeseen one-off costs.
Oliver's has reduced its revenue forecast to between $36 and $37 million, which is expected to generate between $3 and $3.3 million of EBITDA for FY2018.
The day after its announcement, Oliver's major shareholder Endeavor Asset Management jumped ship by selling off its 6.1 per cent stake in the company.
Oliver's explained the only stores sustaining sales growth were those that were open for the whole of FY2017.
The high-growth stores did not generate enough to offset the poor performance of the remaining stores.
The company's new share price of $0.12 is a far cry from its July 2017 listing price of $0.27 and comes just over a month after UK Subway veteran Gregory Madden succeeded Jason Gunn as CEO.
Oliver's has a market position to provide a healthy fast food alternative for travellers on Australia's major arterial highways, it is considered as world's first "certified organic fast food chain."
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