Potter & Moore (LSE:PAM) shares dropped 9% to 21.87 pence in morning trading on Wednesday. The company announced that its first-half revenue would be lower than last year. The beauty and well-being brand manufacturer blamed this decline on tough market conditions, which reflect wider sector trends. Revenue for the financial year so far has fallen behind the same period last year. This aligns with the company's internal expectations for a stronger second half.
Key Details
The company also reported that gross profit margins are much lower than last year's levels due to rising input costs. Potter & Moore plans to tackle these increased costs by raising consumer prices in the coming months. However, the first-half gross profit margins are expected to stay below those of the previous year. The company's strategy for the second half includes securing new retail listings and launching promotions to boost sales.
Background
As of the end of July, Potter & Moore reported cash balances of £4.1 million before lease liabilities and borrowings. This is an increase from £3.6 million at the end of March. A final dividend of 0.55 pence per share is pending shareholder approval at the annual general meeting.
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The drop in Potter & Moore's shares may affect investor sentiment in the beauty and wellness sector. Rising input costs could pressure profit margins across the industry. Higher consumer prices might also impact sales volumes in the short term. Watch for updates on the company's talks for price recoveries and new retail listings, which are key for its recovery plans.
Based on reporting by: proactiveinvestors.co.uk