Shares in Blackmores Limited (ASX: BKL) have held up surprisingly well on Monday considering the sharp fall in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) in the wake of last Friday’s 2.5% fall on Wall Street.

Despite bucking the market trend to rise around 0.5% in Monday trading, Blackmores’ share price is still down around 46% over calendar year 2016 after falling from $220 to less than $120.

Given Blackmores is on my watch list and a company I consider to be of above average quality with above average growth prospects, the significant share price fall is, in my opinion, a reason to get excited.

Here’s a recap on how Blackmores performed for the financial year (FY) ending 30 June 2016:

  • Revenues surged 52% to $717 million
  • Earnings before interest and tax (EBIT) leapt 101% to $145 million
  • Net profit after tax jumped 114% to $100 million
  • Earnings per share increased 114.5% to 580.6 cents per share (cps)
  • Fully franked dividends were expanded by 102% to 410 cps

Growth drivers

Driving the revenue growth at Blackmores was a number of factors including the launch of 117 new products.

Acquisitions and new business ventures also played their part.

In May 2016 Blackmores acquired Global Therapeutics (GT) for $23 million. GT is an Australian market leader in Chinese herbal medicine.

Not one to be left behind after witnessing the phenomenal success of Bellamy’s Australia Ltd (ASX: BAL) with its baby milk formula, Blackmores sought to capitalise on this growth segment via a joint venture with Bega Cheese Ltd (ASX: BGA). Sales of the newly released Blackmores-branded infant formula have already achieved $9 million.

The Asian region was also a key growth driver. Asian customers are estimated to account for around 50% of group sales. Asia in-country sales were up 54% to $129 million and EBIT up 79% to $15 million was recorded.

Of the Asian region, China was the highlight with in-country sales surging by 536% to $48 million and EBIT leaping 979% to $12.6 million.

Why has the share price fallen?

While growth in revenues and earnings have obviously been sensational, the fourth quarter did see a significant slowdown; growth rates slipped from over 124% in the third quarter to 55% in the fourth.

Management pointed the finger at regulatory changes in China and investment spending as contributing factors in the slower growth rate.

Adding weight to negative investor sentiment towards the stock was management’s recent outlook statement which noted that the Australian wholesale market was “volatile and has softened in recent weeks impacted by retailers destocking and some exporters changing the channels through which they acquire products”.

In recognition of this industry assessment, management provided guidance that it expects the first quarter of FY 2017 to be down compared with the prior corresponding period.

Foolish takeaway

Despite the market reigning in its expectations for growth, the long term outlook for Blackmores’ business appears bright. The  positive outlook coupled with the significant decline in share price makes, in my opinion, current metrics quite appealing.

With Blackmores’ shares currently trading near $118, the stock has a trailing price-to-earnings multiple of 20 times and trailing fully franked dividend yield of 3.5%. This could make an attractive entry point into an above average company.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.