Growing pains, but manageable

After experiencing a drop in sequential sales for the December quarter, Yowie returned to sequential sales growth in the March quarter. However, the company is taking a more modest approach to sales guidance to ensure it can fulfill customer (and investor) expectations. We are maintaining our revenue forecasts, but cutting our profitability estimates for FY17-19 due to higher than expected stock compensation costs in H117. Separately, on 27 February, Wayne Loxton tendered his resignation as executive chairman. With a strong senior team now in place, Loxton had hinted that he would eventually step back from an executive role, however we believed he would wait until FY18 once the publishing and other brand extension businesses had been launched.