Downgraded sales growth guidance: Chocolate group, Yowie Group Ltd.’s stock was down 33% on January 03, 2018 as the group slashed FY18 net sales growth guidance from 55% to 17% over FY17 at the back of flat sales for its United States operations and deferred Canada operations while Australian operations have been above expectations. While Q2 global net sales rose up 23% over prior corresponding year, YOW’s net sales in the six months to December 31 were down 11.7% in North America to $US8.2 million ($10.5 million) as Discovery World, which is Yowie’s lower-price brand, performed below expectations, and the total chocolate market in North America slipped by 1.5% during the December quarter. On the other hand, Australian net sales for H1 FY18 were 15% above budget at $US1.8 million, and total net sales for the group for H1 FY18 were up 7.5% to $US10 million. The group’s quarterly gross margin was strong at 55%.

Along with this, the chief executive (Bert Alfonso) of Yowie is stepping down and resigning from the board, effective immediately. Mark Schuessler, formerly chief operating officer and head of the company’s North American business, will be replacing Bert.

YOW stock was otherwise up 16.7% in last one month at the back of efforts on US Retail distribution expansion, and the group was set to release its Q2 report in third week of this month.
Given the current scenario and sentiments on growth, we put a “Hold” on the stock at the current price of $0.14

 
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