Blackmores Returns to Growth with First Quarter Profit of $15.4m

Blackmores Limited (ASX: BKL) today announced a first quarter profit of $15.4 million, up 28% compared to the prior corresponding period, after achieving net sales of $134 million, 9% up on the prior corresponding period.

“In the first quarter of the year we achieved 28% growth in our direct China sales, launched a new range of kids’ products that – true to our values – are more than 99% sugar-free, we maintained tight cost control while continuing to invest in key growth platforms, and launched a new world-class education platform,” said Blackmores Chief Executive Officer Mr Richard Henfrey.

“This is a promising start to the new financial year. We’re pleased with our progress compared to the challenging first quarter performance last year, and we have returned to delivering profit growth.”

“Blackmores has experienced less volatility across the business in the quarter and we have implemented a global approach to pricing which has supported an improvement in underlying margins,” said Mr Henfrey. “Promotional rebates were high in the last financial year as we supported customers carrying high levels of stock. In this quarter we have returned to a more normalised trading environment.”

“Australian retail remains challenging and this was compounded by strong sales at the end of the fourth quarter, which impacted our July result in Australia,” said Mr Henfrey. “Consumer sentiment in Australia has been subdued though sales in Australia continue to be boosted by strong consumer demand from Chinese consumers.”

New product innovation has been well received with broad and growing distribution of Blackmores’ new probiotic range which uses multiple strains of good bacteria, is condition specific and does not require refrigeration. The launch of sugar-free gummy vitamins for kids resonated well with consumers resulting in a stronger sell-in than expected.

Sales to China are growing as the market approaches the famous Double 11 sales event in November with direct China sales, including export and in-country sales, up 28% compared to the prior corresponding period. Excluding China, sales to other markets across Asia were up 12% compared to the prior corresponding period. Blackmores Malaysia launched Project Kindness, a community-focused marketing campaign, which contributed to 16% sales growth compared to prior period (26% in local currency). Sales in Hong Kong were up 25% (32% in local currency) compared to prior period.

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