- Halo Food Co (HLF) tumbles over 10 per cent in early trade on the back of a decrease in online sales
- Halo Food’s subsidiary, The Healthy Mummy (THM), experienced a “more challenging trading environment” for its online business in recent months than forecast
- To remedy the situation, Halo has slashed costs across The Healthy Mummy business by approximately $160,000 a month over the last six months
- Meanwhile, THM will see three additional products stocked on Woolworths shelves nationwide
- Halo Food Co shares are down 10.5 per cent, trading at 1.7 cents at 2:22 pm AEDT
Halo Food Co (HLF) has tumbled 10.5 per cent in early trade on the back of a decrease in online sales.
While its subsidiary The Healthy Mummy (THM), is increasing its range of products to be sold in Woolworths stores, HLF said the brand experienced a “more challenging trading environment” for its online business in recent months than forecast.
The company pinned this on consumers continuing to evaluate and reduce discretionary spending.
Halo also said the tough trading environment had been driven by a combination of macroeconomic factors including inflation, rising costs of living and increasing interest rates, resulting in lower disposable income for THM’s core customer demographic.
As such, the company has seen softer sales of both the digital app subscriptions and The Healthy Mummy products via its eCommerce store.
To remedy the situation, Halo launched a cost rationalisation review and slashed costs across The Healthy Mummy business by approximately $160,000 a month over the last six months.
Halo said it expected it will record a non-cash impairment to the goodwill of The Healthy Mummy on the Company’s balance sheet in its full-year accounts by the end of May 2023.
Nevertheless, the company said the growing retail presence of the THM brand was “performing well at an early stage”.
“It is great to see the continued expansion of The Healthy Mummy in retail and the strong support and roll-out into Woolworths supermarkets,” Halo CEO Jourdan Thompson said.
“The initial demand from a new and broader retail customer in major grocery has highlighted the underlying strength and demand for the brand.”
The new products to be stocked in Woolworths stores include Metabolism tablets and two capsule products: Bloat and Apple Cider Vinegar.
The sales value of the products to Halo is forecast to be approximately $1 million in the first year. This is in addition to the THM powder smoothie products, which are already stocked in Woolworths stores nationwide.
While the increased retail ranging is mitigating the underperformance of the balance of the business and simultaneously increasing the reach and awareness of The Healthy Mummy brand, Halo said it was not yet offsetting the weaker sales in the remaining THM online business.
As the company assesses the strategic options for THM, it plans to undertake a full strategic review of the broader Halo business in the short to medium term.
Halo Food Co shares were down 10.5 per cent, trading at 1.7 cents at 2:22 pm AEDT.