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Why the Yowie share price is down 90% in 2 years

retail investors beat professionals shares

The Yowie Group Ltd (ASX: YOW) share price is now down around 90% since January 2016 as things turn sour for the children’s chocolate retailer.

Back in January 2016 Yowie shares changed hands for close to $1, but today you can pick them up for just 8.8 cents. One of Yowie’s main problems has been that its management team has repeatedly missed its own sales forecasts, which leaves it with a market cap of just $20 million after a 90% share price fall.

For the quarter ending September 30 2018 Yowie posted an operating cash profit of $581,000 on revenues of $4.4 million, however, it has almost its entire market cap in cash on its balance sheet which is a positive for shareholders.

The recent quarter was its first operating cash positive quarter since Q3 FY 2016, although sales in the most recent quarter were actually lower than the prior corresponding period.

It’s the struggles the group had in growing sales in the complex and competitive US market that has seen the stock tumble. Recently, Yowie has attempted to move into its home Australian market to open up another growth avenue, but it seems investors are underwhelmed so far.

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Returns as of 6th October 2020

Motley Fool contributor Tom Richardson has no position in any of the 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 Scott Phillips.

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