Yowie Group Ltd (ASX: YOW)

Revenue Guidance Update:Confectionery company, Yowie Group Ltd (ASX: YOW) was hammered lately on ASX with a 31.7% slip in last five days (as at February 15, 2018). The group has been crushed owing to another guidance downgrade. Following the announcement made in January 2018, US net sales quarter to date in Q3 have been highlighted to be far below the same period last year owing to launch activity by a competitor into the US market in the month of January. The group says that the competitor has been investing quite aggressively in off shelf promotional displays. 

The group further added that competitor’s sales, though unlikely to be maintained, will impact YOW’s achievement in the account through H2. YOW will be releasing the results this week and believes that the revised forecast revenue guidance of 3 January 2018 will be difficult to be achieved with current outlook of year on year growth to be flat. Meanwhile, YOW is working on strategies to address the shortfall.

Despite these updates, Bentley Capital Ltd enhanced its stake in the group from 10.7% to 12.6% and Keybridge Capital Ltd also increased the stake from 10.7% to 12.6%.

It would be important to look at the group’s efforts on any revised strategy. Meanwhile, we give a “Hold” recommendation on the stock at the current price of $0.10

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