The McPherson's Ltd (ASX: MCP) share price is dropping lower again on Thursday.
At the time of writing, the health, wellness, and beauty products company's shares are down 6.5% to $1.17.
This means the McPherson's share price is now down over 65% from its 52-week high of $3.40.
What did McPherson's announce?
This morning the company announced that its Chief Executive Officer and Managing Director, Laurie McAllister, has resigned with immediate effect.
This follows a dreadful year for McPherson's which has seen the company's performance and share price deteriorate materially.
What happened this year?
During the first quarter of FY 2021, the company recorded a decent 4% lift in sales to $49.7 million.
However, it appears as though it tried to take advantage of the incredible demand for hand sanitiser at the height of the pandemic and this ultimately backfired.
While McPherson's reported an 84% lift in underlying profit before tax to $2.9 million, this excludes a hefty $5.7 million non-recurring full provision for the write down of its hand sanitiser inventory.
Management advised that delays in the supply of hand sanitiser products led to a customer cancelling the majority of its orders. This left it with a significant quantity of product.
Since then, the strong demand has dissipated and the supply base for such products has become much more competitive. As a result, McPherson's has been left holding excess quantities of hand sanitiser inventory.
Unfortunately, it went from bad to worse from there. At the start of December, the company revealed that its Chinese Singles' Day sales fell well short of target.
Once again, this left its China joint venture partner, Access Brands Management (ABM), with higher than forecast inventory levels at the end of November.
As a result of this, the company was forced to withdraw its guidance.
What's next?
McPherson's has revealed that Non-Executive Director, Grant Peck, will replace Mr McAllister on an interim basis, effective today. It feels this will provide continuity and aid the transition to a new permanent CEO and Managing Director.
This continuity will be very important given that it only completed the acquisition of the Global Therapeutics business from Blackmores Limited (ASX: BKL) on 1 December.
The board advised that it will now initiate the necessary steps to identify and appoint a permanent CEO and Managing Director and will make a further announcement in due course.
