It has been a day to forget for the Booktopia Group Ltd (ASX: BKG) share price.
In morning trade, the online book retailer's shares have crashed 26% to a record low of 46 cents.
This means the Booktopia share price is now down 67% since the start of the year.
Why is the Booktopia share price crashing today?
Investors have been selling down the Booktopia share price on Tuesday after the ecommerce company revealed the shock resignation of its CEO and that its performance has continued to deteriorate.
In respect to the former, Booktopia's CEO and co-founder, Tony Nash, has informed the board of his intention to step aside. Though, he will continue as a full-time senior executive and director with the company in a new position focused exclusively on growth.
Mr Nash commented: "I look forward to continuing to find ways to grow the business while handing over the duties that come with being the CEO of a larger and listed entity. It's time to hand over the leadership reins to someone who is more capable than me at that job description. I am genuinely looking forward to working with, and for, the new CEO."
Booktopia has commenced a search to identify and secure a new CEO. Mr Nash will remain in the role until a replacement is appointed and then transition responsibilities to the new CEO.
Trading update
Also weighing on the Booktopia share price today has been an update on the company's performance during the third quarter.
That update revealed that revenue for the quarter fell 1% over the prior corresponding period to $64.5 million. Management blamed this on the disrupted start to the academic year, resulting in lower overall revenue from academic book sales which have traditionally contributed strongly to third quarter performance.
Things were even worse for its earnings before interest, tax, depreciation and amortisation (EBITDA) in the third quarter. Booktopia's EBITDA fell 65% to $1.5 million due to the combined impact of increased operating expenses and lower academic book sales.
Based on the above, the company's revenue for the nine months to 31 March is now up just 9% to $194.7 million and its EBITDA is down 63% to $5.5 million.
Outlook… not so good
Unfortunately, things aren't expected to improve in a hurry. In fact, they appear set to get worse before they hopefully get better.
For example, management has provided full year guidance of revenue of approximately $242 million and EBITDA of $3 million to $4 million. The latter means the company will be making an operating loss of $1.5 million to $2.5 million during the fourth quarter.
However, the company intends to address its lack of profitability by reassessing its cost base to ensure business costs and investments are more aligned with the company's current growth trajectory. This will see the company aim to "create the step-change needed to reset the business thus allowing Booktopia to return to a sustainable level of growth and profitability as soon as possible."
Judging by the Booktopia share price performance today, some investors aren't sticking around to see if these initiatives are a success.
