Surfstitch shares have plummeted after the sports retail group slashed its earnings guidance.
The value of the shares more than halved on Tuesday after the company said earnings before interest, tax, depreciation and amortisation would be as low as $2 million.
That's way down on its original forecast of $15 million to $18 million, while FY15 EBITDA was $7.7 million.
At close on Tuesday, Surfstitch shares were down 55.5 cents, or 53.62 per cent, at 48 cents.
Surfstitch, launched out of a Sydney garage in 2007, said revenue growth remained strong but that the rebranding and integration of purchased businesses was taking longer than expected.
Joint chief executive Lex Pedersen said acquisitions including surf shop Surf Hardware International and surf forecaster Magicseaweed would bear fruit in the next financial year.
"These businesses present exciting content and advertising opportunities, which will underpin our long-term competitive advantage," Mr Pedersen said.
The company has appointed Mike Sonand as chief operating officer to oversee a management restructure after challenging market conditions prompted an increase in advertising spend.
The revised results come two months after the departure of co-founder and chief executive Justin Cameron, who quit to join a private equity group with an eye towards acquiring Surfstitch.
Surfstitch said Mr Cameron has not made an offer.
