The company entered into a trading halt in mid-December when its shares slumped almost 45% in 10 days after it warned of regulatory risks in China, its largest growth market, saying licenses for some of its brands may not be renewed and some products may be liquidated at discounted prices. Bellamy’s shares tumbled another 16.5% to A$5.58 after resuming trading today.
Bellamy’s now expects revenue in fiscal year 2017 (ending June) of between AUD 220 million to AUD 240 million. Bellamy’s netted A$245 million for 2016. “This guidance reflects the impacts of higher than anticipated stock levels by Bellamy’s trade customers.”
Even though underlying sales demand on Alibaba’s (BABA) T-Mall, where Bellamy’s sells its infant milk formula products online, has been stable, “1H17 sales were lower than 2H16 sales due to increased stock levels held by resellers and retailers”, said the company in a filing.
Source: Barron’s Asia
Link: http://blogs.barrons.com/asiastocks/2017/01/11/bellamys-australia-tumbles-16-after-firing-ceo-slashing-sales-outlook/