Preliminary FY24 Financial Update

Oliver's Real Food Limited (ASX: $OLI) has released its preliminary and unaudited financials for the October - December 2023 quarter (FY24 2nd quarter). The company reported a shortfall in actual sales compared to forecasts, primarily attributed to the performance of the new Pheasants Nest stores.

Executive Commentary on FY24 Performance

The primary contributing factor to the shortfall in actual sales versus forecasts is the new Pheasants Nest stores. The sales in the opening (4) weeks of these two stores have not met our forecasts, and we are disappointed to report this. It is difficult to forecast sales for any new site, and while long term, the Pheasant Nest stores will be important profit contributors, the time to achieve our sales forecast will be longer than first anticipated. We are seeing some improvement in January at these sites. Our sales expectations remain high, and the Board and management are committed to quickly lifting the sales performance. In addition to the shortfall at Pheasant Nest, store sales across the network came in below our internal forecast and 2% below last year. The quarter generated an operating result $170K less than forecast. On the basis that the sales from Pheasant Nest stores were $500k below forecast, the pleasing aspect was that the rest of the network remained strong, and our gross margins lifted to 64.38% this year from 62% last year. We are now working with our auditors to finalize our first half results, which will be released to the market in late February, and the Board will provide a full report on the half-year results at that time. The overall result for the six-month period from July to December 2023 is reasonable, recognizing the costs and lower sales emanating from both the Wyong store redevelopment and the Pheasant Nest stores launch. In view of the current early trends at Pheasant Nest and across the rest of the store network, the Board updates our financial forecasts for the 2-month January to February 2024 period. The Board acknowledges this is a significant reduction in what was previously advised and assures shareholders that we are working closely with management to improve sales, particularly at our new Pheasant Nest stores. Further commentary will be made at the time we release our December 2023 Appendix 4C later this month.

Outlook and Financial Forecast Update

Oliver's Real Food Limited (ASX: $OLI) reported a shortfall in actual sales compared to forecasts, primarily attributed to the performance of the new Pheasants Nest stores. The company is committed to quickly lifting the sales performance and is working closely with management to improve sales, particularly at the new Pheasant Nest stores. The overall result for the six-month period from July to December 2023 is reasonable, recognizing the costs and lower sales emanating from both the Wyong store redevelopment and the Pheasant Nest stores launch. The Board will provide a full report on the half-year results in late February. Shareholders are assured that the company is focused on improving sales and addressing the challenges faced, aiming to achieve better results in the upcoming periods.