Fevertree cuts forecast as slowdown takes fizz out of UK sales
Drinks supplier Fevertree has cut its full-year revenue forecast amid “challenging comparators” and a slowdown in UK consumer spending in the second half.
The mixer specialist cut its revenue expectations to between £266m and £268m for the full-year, representing year-on-year growth of 12 to 13 per cent.
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Analysts had been expecting revenue of around £272m before today’s announcement, according to Refinitiv data.
Fevertree said the performance of its UK off-trade business – retail sales of its drinks – was behind expectations for the second half. It said this was due to a combination of “very tough comparators in July and August” and a wider slowdown in consumer spending during the period.
The company said its on-trade business – the sale of mixers to hotels, restaurants and bars – was continuing to perform well in the second half, with new accounts and growing interest from customers in its non-tonic mixers.
“Despite challenging comparators, our performance in the UK on-trade underlines the strength of the brand and while the mixer category in the off-trade is moderating alongside the recent slowdown seen across the wider grocery channel, we continue to maintain our clear UK market leadership position,” said chief executive Tim Warrilow.
Outside the UK, Fevertree said its sales are accelerating in the US, where the company recently signed up a US bottling firm to begin bottling its drinks on the West Coast next year, which it called a “significant milestone”.
Warrilow said Fevertree’s progress in the US was “particularly encouraging”.
Fevertree said it was now expecting to report full-year growth of around 34 per cent in the US, ahead of previous expectations.
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Sales also accelerating in Europe, where the company expects to deliver full-year growth of 19 per cent.
Fevetree shares fell over 6 per cent in initial trading.