The Blackmores Limited (ASX: BKL) share price was amongst the worst performers on the ASX 200 index in August.
The health supplements company ended the month with a decline of ~19% compared to a 3.1% pullback by the benchmark index.
This latest decline means that Blackmores' shares have now lost 56% of their value since this time last year.
Why did Blackmores sink lower in August?
Investors were quick to hit the sell button last month after Blackmores released a disappointing full year update.
Whilst it was well known that Blackmores was having a difficult time in FY 2019, the further deterioration in its performance in the fourth quarter caught many investors off guard.
A weak finish to the year led to Blackmores reporting a 1% increase in full year revenue to $610 million but a 24% decline in full year net profit after tax to $53 million.
The biggest drag on the company's performance was its China segment. Sales in the China segment (key export accounts and in-country sales) were down 15% to $122 million due partly to changes in e-commerce laws. And segment EBIT dropped at the even quicker rate of 40% due to increased investments in its brand and the expansion of its in-country capabilities.
Unfortunately, it doesn't look like it will be a quick fix for Blackmores. It warned that trading conditions in China are expected to remain weak during the first half of the new financial year.
In light of this, it expects its first half result to be down on the first half of FY 2019. And while it does expect things to improve in the second half, this is largely down to the benefits of operational efficiencies.
Should you buy Blackmores shares?
This decline has left Blackmores' shares trading at 23x full year earnings, which I don't believe offers investors a sufficient risk/reward to justify an investment at this stage.
I would suggest investors sit tight and wait for its half year update at the start of next year before considering an investment.
In the meantime, I see more value in the shares of fellow exporters A2 Milk Company Ltd (ASX: A2M) and Treasury Wine Estates Ltd (ASX: TWE).
