A conservative approach is definitely warranted but is also should be realistic. Some considerations that I think may change your mind on some of your numbers/analysis.
1. Using Lolli and Pops in steady state as a proxy for Walmart steady state volumes is not appropriate. Foot traffic, positioning, and pricing will all be considerably better in favour of Walmart - with particular emphasis on foot traffic.
2. The average sales numbers represent raw product ability only. There has been no attempt to market nor create the brand yet. The funds raised here are flagged for "marketing and working capital". To assume marketing will not have a a positive impact to average volume is flawed. How much impact I am not sure but the assumption has to be positive.
3. This looks to be a global brand. We are just entering one market in one country. This is blue side I agree but some level of consideration is due given previous success and its ability to compete in a fully competitive market against Kinder over a considerable amount of time.
4. You also give zero attribution to the likelihood of Valero, Walgreens, Safeway, Et others who are and have exhibited positive sales from stocking/trials. Again, with all forms of evidence this must be considered.
5. You give no likelihood to a full rollout to Walmart.
6. There is no way if numbers were bad (imo) Walmart would even consider stocking this product. The fact that is 1500 and not 4500 is more likely a logistics preference.
The main point I guess is that the 40/wk numbers in all pribability will be way too short and given now it is a volume game so is your analysis.
Let me know if you agree.
YOW Price at posting:
60.0¢ Sentiment: Buy Disclosure: Held
(20min delay)