Fever-Tree (LON:FEVR) warned on Wednesday that “short-term headwinds” in its UK market will hit its revenue for the full year.
Shares in the producer of drink mixers were up during Wednesday morning trading.
Fever-Tree blamed tough comparators with last summer and a slowdown in consumer spending.
“Our performance has been behind our expectations in the second half as we continued to lap very tough comparators in July and August and more recently seen a slowdown in consumer spending, as reflected in the wider retail data,” the company said in a statement.
Fever-Tree said that it now expects revenue for the full year to lie within the £266 million to £268 million range, which represents a year-on-year growth of 12-13%.
Earlier this year in March, Fever-Tree saw its annual adjusted core earnings surge, boosted by the UK gin craze.
Indeed, Fever-Tree’s premium tonic water is often paired with the alcohol, benefitting from the nation’s growing thirst for gin.
However, Fever-Tree’s announcement on Wednesday does not come as too much of a surprise. The company previously warned in July that the UK had seen a moderation in growth rates for the first half of 2019.
“We continue to see growth across all four regions. Indeed, sales accelerated in our key growth markets of the US and Europe,” Tim Warrillow, CEO, commented on the announcement.
“Fever-Tree’s progress in the US is particularly encouraging and the signing of a US bottling partner is a further step in building our operations in this exciting market,” the CEO continued.
The CEO said: “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.”
Shares in Fever-Tree Drinks plc (LON:FEVR) were up on Wednesday, trading at +6.26% as of 09:17 GMT.
