Shares in Warpaint London PLC (AIM:W7L) fell 18% to 230p after the colour cosmetics company warned on profits due to "difficult" market conditions and US uncertainty due to tariffs on China.
Headwinds increased over the summer and are not expected to improve before the year-end, exacerbated by one customer entering administration in the last few days.
"The group traded satisfactorily during the first half despite the challenging macroeconomic environment, but we have seen conditions remain difficult in recent months, with both consumer and customer confidence being subdued, which is likely to remain for some time," the company said.
"Coupled with continuing US market uncertainty, alongside a specific customer recently going into administration, we are disappointed to be lowering our expectations for the full year."
House broker Shore Capital said it was reducing its earnings per share forecast by circa 27% to 19.7p, with similar medium-term reductions.
For the first half of the year, Warpaint, which owns brands including W7, Technic and Fish Soho, reported an 8% increase in revenue to £49.3 million, supported by the contribution from Brand Architekts acquired in February.
UK sales rose 15.9% to £18 million, while international revenue grew 3.2% to £31.3 million. Brand Architekts accounted for £6.10 million, representing 12% of Group revenue.
Profit before tax fell 41% to £6.4 million, reflecting £4.6 million of non-cash losses on FX contracts, a £3.9 million gain from the Brand Architekts acquisition, and £1.3 million in exceptional costs.
The group ended the period with £17 million in cash, up from £5.5 million, partly due to £6.2 million acquired through the Brand Architekts deal.
The board hiked the interim dividend 14% to 4p per share.