Fevertree Says Sales of Mixers Hit by U.K. Retail Crisis
Fevertree Says Sales of Mixers Hit by U.K. Retail Crisis
(Bloomberg) --
Fevertree Drinks Plc’s high-end mixers are flying out of bar fridges in countries such as Canada, Australia and New Zealand, helping to offset a slowdown at U.K. grocers.
The maker of Refreshingly Light Cucumber Tonic Water and Madagascan Cola said the growing thirst for gin in Commonwealth countries is boosting demand for its products. In the U.K., Fevertree expects to return to stronger growth next year, Chief Executive Officer Tim Warrillow said on a conference call with analysts.
The upbeat outlook sent the shares up as much as 8.4%, reversing an earlier decline of 7.6% after the company said it expected annual revenue of 266 million to 268 million pounds ($343 million to $346 million), compared with an average analyst estimate of 275 million pounds.
The company is seeking more revenue outside the U.K. as its trendy drink mixers suffer from the country’s depressed retail scene, with consumers shifting online and Brexit-related concerns holding back spending.
Production is set to begin next year under Fevertree’s first pact with a U.S. bottler, which should build momentum in that market, Ed Mundy, an analyst at Jefferies, said in a note to investors.
From its initial public offering five years ago through last year, Fevertree was an investor darling, with its shares rising almost 30-fold as the company benefited from the renewed popularity of the classic cocktail. Then doubts began emerging about its growth prospects, and the market value has been cut by more than half since September 2018.
While Britons may be shopping less, they’re still going out. Sales are holding up well at bars and restaurants despite the weakness at supermarkets and other retail outlets, Fevertree said.
To contact the reporters on this story: Eric Pfanner in London at epfanner1@bloomberg.net;Thomas Buckley in London at tbuckley25@bloomberg.net
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Marthe Fourcade
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