Hornby who makes model trains have warned that due to the cost of living crisis sales are “behind budget” and shares have slumped by 20% on Tuesday morning to 23.2p.
The firm said the blame is due to “the challenging consumer economic climate” as their sales performance in the three months to 31 December.
The firm added: “We remain cautious in our outlook for the full year and beyond due to a high level of uncertainty around the impact of several factors on our sales, such as inflation and mortgage costs for consumers, but with employment expected to remain high we are hopeful that the confidence in consumer spending remains.”
“This has been driven by better availability of stock, price increases, and investment in e-commerce platforms and digital media,” their shareholders were told.
However cumulative sales for the year are up by 6% so far against the previous financial year, the firm said they have recorded an increase in direct-to-consumer sales which are up 44% compared to the same period in 2022.
Lyndon Davies, executive chairman, said, “Sales at Hornby continue to grow with a stream of new products in the pipeline.
“We look forward to the continued growth in direct relationships with our customers.”