Fevertree Drinks Plc said train strikes in the lead-up to Christmas hurt sales and forecast that profit could decline in the current fiscal year as the cost of glass hit the maker of spirit mixers.
Sales in the UK fell 2% last year because of widespread rail disruption during the festive period when usually many consumers would be drinking during celebrations at pubs and restaurants, Fevertree said Thursday.
Fevertree stock fell as much as 15% in early trading. The shares have more than halved over the past twelve months.
The British maker of high-end spirit mixers, such as Madagascan Cola, warned again that the rising cost of glass bottles is weighing on its business and will likely add an extra £20 million ($25 million) of costs in the current fiscal year. About 80% of the company’s products are sold in glass bottles.
Fevertree now expects adjusted earnings between £36 million and £42 million this fiscal year, a lower range than last year.
The guidance is “very disappointing,” given the company’s previous comments about upcoming profitability improvements, RBC Europe Ltd. analyst Emma Letheren wrote in a note to clients.
Some investors may be skeptical about the company’s ability to meet its top-line forecast for the year, Morgan Stanley analyst Yubo Mao wrote in a note.
