Blackmores share price has dived 10% despite revenue boost

The Blackmores Ltd (ASX: BKL) share price was on a slippery slope into the red on Thursday after the company released its full-year results.

At the close of trading today, the health supplements company’s shares were down 10.07% to $73.19. Let’s take a look at the results.

Double-digit revenue growth

Blackmores delivered its FY 2022 results for the 12 months ended 30 June 2022. Here are some of the key financial highlights:

• Group revenue increased 12.8% year on year to $649.5 million
• Group underlying earnings before interest and tax (EBIT) of $56.6 million, up 19%
• Group underlying net profit after tax (NPAT) of $31.1 million, up 22.6%
• Final dividend of 32 cents per share, fully franked, bringing the full year dividend to 95 cents per share, up 33.8%
• Net cash of $82.2 million

What happened in FY 2022?

Blackmores reported a solid financial performance, with growth recorded across all three brands for the first time in four years.

Continued focus on product innovation and investment led to an increased revenue base across the international, China, and Australia/New Zealand (ANZ) segments.

In particular, the international portfolio delivered EBIT growth of 43.9% to $29.8 million. This was underpinned by cost management, disciplined pricing and a shift to higher margin channels in all major markets.

Furthermore, the China segment registered an increase in EBIT by 11.2% to $16 million. Blackmores noted that gross margin was broadly flat with price initiatives and favourable mix offsetting higher input costs challenges.

And lastly, the ANZ division experienced a lift in EBIT by 7% to $43.1 million through gross margin improvement.

Overall, the group simplified its operations and strengthened the supply chain to address the significant disruption caused by COVID-19.

In addition, it implemented initiatives to enhance manufacturing productivity as input costs increased.

What did management say?

Blackmores CEO Alastair Symington had this to say about the results:

We are pleased to deliver a strong financial result during a period which continued to be impacted by the ongoing effects of COVID-19 and significant disruption to supply chains and increased input costs.

The resilience of our business model, together with the strength of our brands and distribution channels, have enabled the group to respond to these challenges to deliver top line growth along with further margin expansion.

What’s the outlook for FY 2023?

Looking ahead to the new financial year, Blackmores advised it remained focused on executing its strategic and commercial plan.

This involves expanding its distribution footprint and investing in brand awareness across the international segment.

In the ANZ business, Blackmores will spend more on advertising and channel differentiation behind its three-brand strategy.

With China, management is trying to navigate consumer and trade headwinds caused by government-mandated COVID-19 lockdowns. However, there’s hope that when this is lifted, e-commerce platforms will regain more traffic.

Blackmores share price snapshot

In 2022, the Blackmores share price has fallen 18.5%, but is relatively flat when viewed over the last 12 months.

In comparison, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) sector is up 3.6% for the current calendar year.

Blackmores commands a market capitalisation of approximately $1.42 billion.

The post Blackmores share price has dived 10% despite revenue boost appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Blackmores Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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