A more confident tone in yesterday’s quarterly sales report from vitamins group, Blackmores (BKL) which suggests the company could be over the damage caused by uncertainty in its key markets in China.
And helping the company could be new markets in Vietnam to make up for the loss of sales in China.
Blackmores said its sales have been improving over the first nine months of the financial year, but are down from a year ago thanks to changed buying patterns in China which in turn affected sales in Australia to Chinese tourists.
Blackmores generated sales of $496 million in the nine months to March 31, down 6.7% from $532 million a year earlier.
Sales have improved quarter by quarter in this financial year, from $149 million in the first three months, to $173 million in the second quarter and $174 million in the third.
Net profit in the nine months was down 43% to $43 million.
The company said sales in Australia and New Zealand are down 26% on the prior corresponding period, due to a decline in sales by Australian retailers to entrepreneurs selling to consumers in China.
China “in-country” and export sales jumped 60% in the nine months to March, to $92 million.
Blackmores said it will launch 13 products in Vietnam in the coming months after signing a deal with Vietnamese distributor Mesa, which supplies 150,000 retail stores.
“Vietnam is a market we are excited about, with enviable economic growth, a growing investment in the region and double-digit growth in the vitamin and dietary supplement category,” chief executive Christine Holgate said in yesterday’s announcement. Blackmores expects its profit for the 2016-17 financial year will be higher than in 2014-15, but will not match the exceptional performance of 2015-16.
"We remain confident in the group’s strategic focus and growth prospects," Ms Holgate said. Blackmores shares jumped nearly 4% to $106.49.
