The Blackmores Limited (ASX: BKL) share price has been under a lot of pressure for over a month, well before the wider ASX correction began in late February.
After reaching a high of $94.95 on February 5, 2020, Blackmores shares have fallen 27.4% lower to be trading at $68.95 at the time of writing.
On 12 February, the company announced a guidance downgrade and suspension of its dividend payments which saw its share price drop by 13% on a single day.
So, with Blackmores shares now trading around levels last seen in August last year, does this present a buying opportunity for investors?
Decline in revenues in Australia and China
Late last month, Blackmores released its half-year results which I believe illustrate the challenges that the company is currently facing.
Blackmores recorded revenue in its Australia and New Zealand segment of $115 million in the half, which was unfortunately a 20% decline on the prior corresponding period (pcp). In addition, the company's China segment saw a revenue decline of 6% during the half.
On a more positive note, Blackmores reported that overall revenue for the rest of Asia increased by 29%, with Malaysia seeing growth of 9% and Indonesia seeing growth of 45%.
Blackmores expects its overall revenues in the second half of FY 2020 to be similar to that achieved in the first half. However, the company noted that higher manufacturing costs, as well as other factors including the impact of the coronavirus outbreak, are likely to have a very significant impact on its overall full-year result.
Growth strategy for Blackmores moving forward
Blackmores currently has plans underway to strengthen its Australian business as it realigns its business strategy.
Additionally, Blackmores' international strategy will see the company ramp up its investments in China. The company will also place a greater focus on the Indonesia market and is aiming to enter the Indian market within 12 months.
I believe Blackmores' move to enter India is a great step forward and could offer massive potential for the company in the years to come. Blackmores views India as a good opportunity, with the country's vitamin and dietary supplement market growing strongly.
Are Blackmores shares a buy?
I believe that Blackmores' recent sub-par performance has been disappointing. However, on the positive side, the company does appear to be getting its business back on track again with a solid international growth strategy. I particularly like its plans to enter India.
In addition, I believe that Blackmores shares have been sold off too harshly by the market over the past month or so. Therefore, I believe this offers a buying opportunity for investors prepared to take a long-term view and ride out any current market volatility over the next few months.
