After 2.8% growth in like-for-like sales – which do not include new store openings – over Christmas, shareholders hoped the retailer would deliver growth for the 2013-14 financial year.
But with two weeks to go until the year end, it has now delivered a profit warning that sent shares plummeting by almost 20%.
Shares were down 96.25p, trading at 408.75p per share, making it the biggest faller on AIM.
But a bullish chief executive Steve Lewis said: “The Majestic proposition remains compelling to the consumer and our future growth prospects remain bright. I am confident that the investments we are making over the course of the next twelve months will drive future shareholder value.”
Nielsen data confirmed that Majestic had held its market share of 4.1%.
Investec analyst Kate Calvert said: “This is a disappointing setback from what is a well-run, highly cash generative company. Its growth opportunities remain unchanged, driven by the store roll out programme, online and its commercial business. Key risks are changes in the economic and competitive environment.”
Majestic plans to increase its empire to 300 stores and broaden e-commerce operations, and to cope with its increasing footprint it needs to expand its logistics with a new distribution facility and new commercial and sales teams.
It said: “These investments are necessary to ensure that we can drive further growth although the costs in the short term mean that the board now anticipates a flatter profit growth profile in the 2015 financial year.”