Yowie said 50% net sales growth overall "is solid"

Yowie said 50% net sales growth overall "is solid"

Australia-listed confectioner Yowie Group has trimmed its forecast for its annual sales growth from a jump of 85% to one of 70%, despite reporting a "record" 50% sales increase for its third quarter.

Group global CEO Bert Alfonso said in a statement to the Australian Securities Exchange today (19 April) as Yowie enters the fourth quarter, the group was lowering the growth rate from the previous 85% to 70% "due to lower US sales in Q3 and a projected staged roll-out into Canada, our third market".

Alfonso said the 50% net sales growth Yowie saw in its third quarter was "solid after allowing for the impact on orders resulting from low inventory levels at the start of the quarter and from a distributor change made by our largest customer".

Yowie said the move impacted sales for the quarter by "around US$500,000", but "that distributor change is now going smoothly and we fully expect orders to return to normal in Q4".

Net sales for the quarter were $5.9m, which Yowie said were "the highest recorded" by the group in any quarter. Net sales on a year-to-date basis for the nine months to 31 March were $15.3m, which the group said was an increase of 60% over the comparable period in 2016.

The group said the third quarter "included initial shipments of $1.2m to Australia with Yowie in retail distribution in selected channels from mid-April". Cash levels "remain very healthy at $29.2m".

Yowie sold branded confectionery in Australia in the 1990s and announced its relaunch in the country in February. The group also sells its products in the US.

Yowie said March also saw the "highest production output on record of five million units, with inventory holding cover now stabilised at four weeks' cover". 

Alfonso added: "I fully believe that while projecting our young business will remain challenging, our business fundamentals remain strong as well as our longer-term growth potential."