Yowie Posts $65k Q3 Profit Amid 23% Sales Drop and $4.15m Loan Default

A Seasonal Turnaround

Yowie Group Ltd has reported a notable turnaround in its seasonal sales performance for the third quarter of fiscal 2025, posting a net profit of $65,400 and a positive EBITDA of $33,000. This marks a significant shift from prior years when the company consistently lost money on seasonal sales despite higher revenue during Christmas and Easter periods. The improvement reflects targeted efforts in cost control, product enhancements, and disciplined sell-in strategies, enabling Yowie to achieve positive returns for the first time in its seasonal sales history.

Sales Decline and Market Challenges

Despite the profit, Yowie’s net sales declined by 23% year-on-year to $3.95 million, with North American revenue down 8.6% and Australian sales plunging 37.4%. A key factor was a major North American customer’s decision to reduce store facings for Yowie products, potentially cutting annual revenue by up to $1.9 million. This setback underscores the fragility of retail shelf space and the importance of customer relationships in the confectionery sector.

Capital Constraints and Keybridge Default

Yowie’s progress is overshadowed by a critical working capital squeeze caused by the default of Keybridge Capital Limited on an unsecured at-call loan facility of approximately $4.15 million. Yowie has called in the loan and is actively pursuing full recovery, even announcing plans for an all-scrip takeover offer to gain control of Keybridge’s operations. However, ongoing media attention and the default have limited Yowie’s access to alternative financing, posing a significant risk to its liquidity and growth plans.

Preparing for the NBA Launch Amid Supply Chain Volatility

Looking ahead, Yowie is in the advanced stages of launching an NBA-themed product range, anticipated in fiscal 2026. The launch has been delayed due to supply chain disruptions, including tariffs on Chinese toy components and record-high cocoa prices. Yowie’s strategic move to source toy components directly from manufacturers rather than third parties has mitigated some tariff impacts, preserving unit economics. The NBA range is expected to be a key growth driver, but its success hinges on overcoming these external challenges.

Operational and Leadership Developments

On the operational front, Yowie’s Australian manufacturing arm, Ernest Hillier, returned to profitability with a quarterly profit of $146,700. Investments in production facilities and food safety certifications, including the Sedex SMETA 4-Pillar audit and FSSC 22000 certification, have strengthened its market position. Leadership changes include the retirement of North America Country Manager Leo Valle and the appointment of two independent non-executive directors with expertise in branding and operations, signaling a renewed focus on governance and strategic growth.

Yowie also raised $324,000 through a 15% equity placement in May 2025, reflecting ongoing efforts to shore up capital amid challenging market conditions. The company continues to review costs across raw materials, staffing, and distribution to maintain momentum.