Fever-Tree (LON:FEVR) shares plunged on Monday after the business said that the Christmas trading period was a “challenging” one in the UK.
Shares in the producer of premium drink mixers were down over 20% during Monday morning trading.
The company revealed that group revenue is expected to amount to £260.5 million. However, Fever-Tree said that this result is below what it expected and reflects the “subdued” trading over Christmas in the UK.
Fever-Tree highlighted that the wider retail environment in the UK was hit by a “challenging” Christmas.
It said that the mixer category was “not immune” from the weak consumer confidence and slowdown in spending.
“Whilst Fever-Tree remained the clear market leader, the expected improvement in trading during this important period did not materialise with the macroeconomic uncertainty leading to a subdued end to the year across both the On and Off-Trade,” the business said in a statement.
Tim Warrillow, CEO, commented on Monday’s update: “Despite the subdued end to the year in the UK, we have delivered a strong performance across many of our regions in 2019 and begin 2020 with real momentum in a number of key growth markets.”
“Whilst the UK mixer category has clearly not been immune from the consumer belt tightening seen in recent months, we remain the clear category leader and have a strong platform to return to growth during 2020 and beyond,” the CEO continued.
“However this is a global opportunity which remains in its relative infancy in many markets.”
The CEO said: “The trend towards premium spirits and premium long mixed drinks continues to gather momentum around the world. Fever-Tree is the no1 premium mixer globally and our performance in 2019 across US, Europe and as far afield as Australia and Canada highlights the fast-growing international strength of the business.”
Fever-Tree had already given some indication of what to expect. The company warned at the end of November last year that “short-term headwinds” in its UK market were set to hit its revenue for the full year.
In the past, Fever-Tree has benefited from the UK’s unquenchable thirst for gin. Indeed, the business has been boosted by the nation’s gin craze as its premium tonic water is often paired with the alcohol.
Shares in Fevertree Drinks plc (LON:FEVR) were down on Monday, trading at -21.56% as of 10:07 GMT.
