British luxury carmaker Aston Martin (AML, Financial) lowered its earnings forecast for this year, citing supply chain disruptions and weak demand from China. The company's stock fell as much as 12% during early trading in London, marking the largest drop since May 1, and has declined 37% year-to-date.
Aston Martin announced it expects annual sales to decrease by approximately 1,000 units. Adjusted earnings before interest, taxes, and amortization (EBITA) will be slightly below last year's level, and the company no longer anticipates positive free cash flow for the second half of the year.
The European automotive industry as a whole has been lowering performance targets recently. Following Mercedes-Benz and BMW, Volkswagen also revised its profit forecasts last Friday due to declining demand in China. Stellantis also cut its full-year profit margin expectations on Monday.
This forecast revision is the first major move by the new CEO Adrian Hallmark, who took office this month with the mission to turn around Aston Martin's fortunes. Hallmark previously led Bentley Motors.
The company also stated on Monday that it will not achieve its previously set target of a 40% gross margin for this year.
