It seems a long time ago that Fevertree shares were the talk of the town as the group established itself as a leading tonic brand in the UK and entered the US market.
Fevertree shares are now worth less than 25% of what they were at their highs, and growth is disappointingly slow.
Once considered a drinks market disruptor, the group didn’t produce any revenue growth in the first half. Poor weather contributed to the soggy sales, but using that excuse usually means a company has nearly peaked in market share terms.
”Fevertree shareholders might be nursing sore heads this morning as the premium mixers maker posted a disappointing trading update, cutting its annual revenue growth forecast,” said Mark Crouch, Market Analyst at investment platform eToro.
Although the group enjoyed sales growth in the US in the first half, it was entirely offset by slowing sales in the UK. Total group revenue for the first half was down 2%.
The worrying signs for Fevertree were too much for investors on Thursday, and the stock slid by over 9%.
“Fevertree served up a mixed set of first-half results to investors. Revenue failed to bubble higher despite double-digit growth in the US where it continued to gain market share,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“The US is already Fevertree’s largest contributor to the top line, but there’s plenty of room to run given the size of this vast market. Performance in the UK and Europe wasn’t so spritely. Despite gaining market share in these regions too, revenue fell 6% and 10% respectively as poor weather and a tough consumer backdrop weighed on demand in the second quarter. While the weather which convinced some punters to stay at home is out of Fevertree’s control, it’s doing well to manage the factors that are within its control. It’s kept a tight lid on costs in the first half, and profitability is improving quickly as shipping rates, energy costs on glass bottles and wider inflationary pressures ease.”