Macheezmo Mouse Stock Sinks 35% As Company Deflates Profit Forecasts

Macheezmo Mouse Restaurants Inc.'s stock tumbled 35 percent today after the company announced it expects first-quarter earnings to be substantially lower than last year's and also lower than current analyst estimates.

The stock was down $1.75 at $3.25 near the close of trading.

Macheezmo Mouse's share price has fallen steadily since it hit a peak of $11 in November. The company went public last September at $6.

The chain, which features low-fat Mexican-style food in its 22 restaurants in the Seattle and Portland areas, has been hit by intense, new competition, said Rex Smith, president and chief operating officer of Macheezmo Mouse.

"I think we've just come to the saturation point," Smith said.

He said he remains convinced that a strong niche market for casual, healthful, Mexican-style food exists.

In last year's first quarter the Portland-based company reported profit of $379,000, or 12 cents a share, on sales of $3.2 million.

Analyst estimates for the current first quarter have been around 4 cents.

Same-store sales are down more than 25 percent from last year. Several of the new restaurants are also not performing up to expected levels, company officials said.

Smith said the company has scaled back plans for opening several new stores but would not elaborate.