Own Blackmores (ASX:BKL) shares? Here’s how the company is aiming for 1 billion consumers

The natural health products company has some ambitious growth plans.

| More on:
Business executive aiming bow and arrow at target.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Blackmores shares have fallen since the company reported half-year results in February
  • The company has a three-tiered growth plan
  • Pet supplements could see a big lift in demand as people return to onsite work

Blackmores Limited (ASX: BKL) shares closed down 1.63% on Friday at $75.40.

With those losses factored in, Blackmores shares are now down 18.6% since the closing bell on 23 February. That was the day before the company released its half-year financial results for the six months ending 31 December.

That fall has come despite Blackmores reporting a 14.3% year-on-year lift in revenue, to $346 million, and upping its interim dividend by 117% to 63 cents per share.

ASX investors may have been selling Blackmores shares after the company declined to provide earnings guidance for the six months ahead, citing “ongoing uncertainty” caused by COVID-19.

But that’s not holding the company back from its ambitious growth plans.

How to reach out to a billion consumers

Blackmores is aiming to expand its reach to one billion unique consumers within five years. That’s up from 500 million today.

This doesn’t mean it’s expecting a billion customers, mind you. But rather a billion people who recognise it as a leading Aussie health product provider.

“If 1% of that billion converts into a sale for Blackmores, then that enables us to achieve our financial goals. If we can reach a billion consumers, we can be one of the biggest health natural health companies in Asia Pacific,” Blackmores CEO Alastair Symington said quoted by The Australian Financial Review.

So, how is the company planning to double its reach?

First, it’s targeting expansion in China, a core existing market, as well as its other high-growth international markets in Southeast Asia, including Indonesia and India.

While Chinese sanctions have hampered some Australian exporters, like those involved in the wine or coal industries, Symington doesn’t believe his company will become a target:

We don’t expect that there’ll be any of these tougher sanctions that would come on international health products that the Chinese people would be looking for. I think the only time that that could come is if there was a legitimate alternative locally that the consumers were as comfortable with, and we don’t see that yet.

Another growth pillar that could help propel Blackmores shares higher is pet health supplements, sold under the company’s Paw brand.

As COVID-19 restrictions are rolled back people are returning to onsite work, often for the first time in two years. That may come as a relief to some workers. But many of their pets, now accustomed to fulltime stay-at-home carers, won’t agree.

Enter Blackmores’ Complete Calm, intended, as the name implies, to calm your anxious dog down.

According to Symington (quoted by the AFR):

Just in the last month or so, everybody’s changed their habits and are moving back into commuting. These pet parents have been looking after their animals for two years. The new pets have not had a situation where the pet owners have been separated from them.

Symington said online inquiries regarding anxious pets have increased by 50% since the end of January.

How have Blackmores shares been tracking?

Blackmores shares have struggled in 2022, down 17.5% since the opening bell on 4 January.

By comparison the S&P/ASX 200 Index (ASX: XJO) is down by around 4% year-to-date.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Blackmores Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Consumer Staples & Discretionary Shares

Couple look at a bottle of wine while trying to decide what to buy.
Consumer Staples & Discretionary Shares

Is the Treasury Wine share price a buy before the company reports this week?

Are Treasury shares a buy today ahead of its earnings?

Read more »

Woman thinking in a supermarket.
Consumer Staples & Discretionary Shares

Can Coles shares deliver 13% growth AND tasty dividends this year?

We see what the experts are saying about the grocer's outlook.

Read more »

falling milk asx share price represented by frowning woman tasting sour milk
Consumer Staples & Discretionary Shares

The A2 Milk share price has had a tough week. Could this other ASX dairy company cash in?

This week delivered disappointing news for A2 Milk shareholders...

Read more »

two children squat down in the dirt with gardening tools and a watering can wearing denim overalls and smiling very sweetly.
Consumer Staples & Discretionary Shares

‘Back to a growth mindset’: Expert names ASX share ready to take off

In just two years this business overcame devastation and is now ready to grow again, reckons this fund manager.

Read more »

a happy woman wearing a white towel around her chest and another around her head laughs heartily while holding two slices of cucumber over her eyes as part of a beauty regime.
Consumer Staples & Discretionary Shares

Adore Beauty share price volatile following CEO resignation

Adore Beauty's CEO has called it time.

Read more »

A man looks sadly away from his computer screen as he holds a slice of pizza in his hand with an open pizza box in front of him on his desk.
Consumer Staples & Discretionary Shares

Is it a problem for shareholders that Italians don’t like Domino’s Pizza?

The pizza chain appears to have fizzled out in Italy.

Read more »

A group of people clink wine glasses in an outdoor, late afternoon setting to celebrate the rising Treasury Wine share price
Consumer Staples & Discretionary Shares

Treasury Wine share price up amid key China trademark win

Pop open the champagne bottle: the company just won a Chinese court case.

Read more »

a small girl sits with her hand holding up the side of her face as she looks down in a downcast manner as she drinks a glass of milk through a straw.
Consumer Staples & Discretionary Shares

Why is the A2 Milk share price spilling 8% today?

It's been a tough day for A2 Milk shareholders.

Read more »