The Australian Pharmaceutical Industries Ltd (ASX: API) share price has been amongst the worst performers on the local market this morning.
In early trade the shares of the company behind the Priceline pharmacy chain are down 10% to $1.59.
What happened?
After the market closed yesterday Australian Pharmaceutical Industries announced a revised profit guidance for the financial year ending 31 August 2017.
Despite the company maintaining its retail market share during the period, a further decline in consumer sentiment means that management expects full-year net profit after tax to be approximately 5% higher on FY 2016's result.
Previous guidance had been for a minimum of full-year net profit after tax growth of 10% on FY 2016.
Should you buy the dip?
Following today's decline, Australian Pharmaceutical Industries' shares are trading at approximately 14x estimated full-year earnings.
While this is reasonably cheap and makes it a good alternative to rival Sigma Healthcare Ltd (ASX: SIG), I would suggest investors hold off an investment until it does release its full-year results in October.
Whilst I feel confident the company will deliver on its new guidance, its FY 2018 outlook is likely to play a key role in the recovery of its share price.
As a result, I think the prudent thing to do is to wait to see what management has to say about the year ahead.
