Johnson Service Group plc (LSE:JSG) shares fell 15% on Thursday after the company flagged a weaker start to summer trading in its key HORECA division.
While first-half group revenue rose 5.5% to £257.6 million, and margins improved, management pointed to ongoing challenges in the hospitality sector and noted that volumes only started to recover in the last two weeks of June.
The textile rental and cleaning group also highlighted that consumer discretionary spending remains unpredictable, raising concerns about the outlook for the rest of the year.
Despite stable performance in its Workwear business and a continued focus on debt reduction and cost control, investors reacted to the cautious update and uncertain trading environment.
The company said it remains confident of achieving its margin targets but will continue to monitor market conditions closely, especially ahead of the busier summer period.
The stock fell 23.75p to 129.65p.