Earlier this week I picked out what I considered to be the three best results during earnings season in February.
Today I thought I would look at the results which I felt were amongst the worst last month. Here are three that I found underwhelming:
Blackmores Limited (ASX: BKL)
I had high expectations for Blackmores this earnings season, but its results were a huge disappointment. The health supplements company delivered sales of $351.8 million and EBIT of $49.3 million for the first-half, compared to the market's expectation of sales of $377.4 million and EBIT of $57 million. But on top of this, management warned that there is a shortage of key ingredients like fish oil and whey protein, increasing competition in China, and weakness in the Australian and New Zealand market.
BWX Ltd (ASX: BWX)
The owner of the Sukin skincare brand reported a net profit of $5.4 million on revenues of $67.2 million for the six-month period ended December 31. While this was a decent half, its outlook was weaker than I expected. The company's decision to discontinue third party brand representation is expected to hit full-year revenues by $6.5 million, meaning FY 2018 EBITDA is forecast to be in the range of $42 million to $46 million. This is much lower than I expected and is likely to be why its shares have crashed since the results release. BWX's shares could now be getting cheap enough to look at buying again, though.
Super Retail Group Ltd (ASX: SUL)
Last week this retail conglomerate delivered a half-year result which fell short of the market's expectations. For the first-half of FY 2018, Super Retail reported sales growth of 2.2% and normalised net profit after tax growth of just 0.7% on the prior corresponding period. Whilst this was disappointing, its decision to acquire Macpac for NZ$144 million appears to have puzzled the market. I suspect many investors, myself included, had expected the company to divest its struggling Leisure segment, not add to it.
