Fever-Tree’s U.S. Surge Offsets Sluggish Half-Year Profits, Triggers Revised Annual Forecast
Fever-Tree delivered a mixed bag in its latest six-month report. On the upside, the brand gained ground in the U.S. and expanded its European market share. However, weaker overall results prompted a cut in its annual profit forecast. The revised core profit estimate now ranges from £30 million to £36 million, down from £36 million to £42 million.
For the first half of 2023 ending in June, core profits plummeted 54% to £10.2 million. This decline was mainly attributed to elevated glass costs that ate into margins, even with product price hikes. Despite this, the firm saw its shares dip just over 1% to £12.80 but remain 60% higher than their low in the fall of 2022.
Investors can take solace in a 9% revenue bump to £175.6 million, largely fueled by a 40% surge in U.S. sales. CEO Tim Warrilow lauded the brand’s burgeoning presence in the world’s largest premium spirit market. Expected full-year revenues stand between £380 million and £390 million.
In the UK, Fever-Tree captured its highest ever market share by value and was buoyed by the positive response to its new line of cocktail mixers and adult beverages. Despite gloomy British weather impacting sales, the company aims to maintain a gross margin guidance of 31% to 33% through year-end. It remains committed to regional expansion and forecasts significant margin growth and a 15% EBITDA margin for FY24, exceeding market expectations.
