Steady course through choppy waters

Success for a start-up is rarely a straight line. Production implementation difficulties affected Yowie’s ability to fulfil orders in its December quarter. However, management is sticking to its long-range plans to build on its success in the US by pushing to expand the brand to two to three markets outside the US in FY17. While the expansion timetable is in our view more aggressive than that of similar start-up companies, we believe the investment spending and expansion tactics are quite conservative. Our model now includes our estimates for sales outside the US (OUS); however, it includes more modest revenue and profitability expectations for FY17-19, but we maintain our confidence in the company’s long-term growth and profitability prospects.