The company is now targeting revenue for FY21 in the order of $1.20 billion to $1.25b, it said.
In February it said it was targeting revenue of $1.4b, guidance it had already cut from $2b in November.
According to a2MC, while third-quarter trading has been “broadly in line with plan, it is clear that the actions taken to address challenges in the daigou/reseller and cross border ecommerce channels (CBEC) will not result in sufficient improvement on 3Q21 in pricing, sales and inventory levels to meet our previous guidance based on April sales being well below plan”.
As a result, “more aggressive actions to address these issues will be taken which will benefit consumers and the company’s customers, distributors and partners”.
Among other things, the daigou/reseller margin support programme will cease and the company will work with its customers and distributors to improve the dating of inventory, it said.
Rebalancing inventory by further reducing sell-in to the daigou/reseller and CBEC channels will need to continue for the rest of 4Q21 and this may continue into 1Q22, it said.
The goal is to reduce customer and distributor inventory to target levels. While this is necessary to restore the overall health of these channels, it will result in significantly reduced sales for FY21, the company said.
It said it recognised the China market and channel structure is changing rapidly and has commenced a comprehensive process to review its growth strategy and executional plans to respond to this new environment.
At the same time, the company announced Peter Nathan has resigned from his role of chief executive Asia Pacific.
He is expected to remain with the business for a period of time to assist with a smooth and orderly transition. A search process will commence shortly and consider internal and external candidates.
A2MC also said it is “actively considering” capital management initiatives, including a potential share buy-back and an update will be provided at the full-year results in August.
BusinessDesk
