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BWX’s Gration acknowledged that the major change, which caused the group to slash its profit forecast, was that it could no longer engage in a practice where retailers increased sales by ‘selling’ more products to their distributors than they could sell to consumers. . The retail winds have changed so rapidly that this practice of channel filling – which the company had relied on in its forecasts given in May – is no longer tenable just 6 weeks later. “Retail conditions have been challenging and changing, putting more pressure on our retail partners and ourselves with rising inflation, rising prices and rising interest rates,” Gration explained to analysts and investors on a conference call following the announcement of the capital increase in late June. “When we provide trade updates in May, our plan assumes sales and holds certain inventory levels with select wholesale retailers in June. Challenging market conditions have caused us to change our approach.” BWX’s retail partners are

However, last week’s full-year guidance range had a midpoint of just $14 million – no higher than its semiannual figure. It’s a big year-over-year decline, but investor updates emphasize that flagship brand Sukin is still increasing sales by 24 percent to hit a three-year high. Sukin is thus unlikely to be a problem child. As such, Go-To may not yet achieve the $19 million revenue in financial year 2022 previously estimated in internal documents. The downgrade created some pressing problems for BWX’s balance sheet, and the $23 million upgrade felt rushed. While 50 percent discounts are not uncommon on Sukin products, their extension to the parent company’s share price is worrying. The stock was lowered by just 60¢ – no more than the price paid for the first half of the Go-To. Given that BWX paid dividends of about $4 million a year ago when its stock price was $5.31, this is an unfortunate “sell low, buy high” cash management strategy. But, the wealth meltdown for BWX shareholders m