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Fevertree shares run out of fizz on margins warning
27th Jan 2022 09:37
(Sharecast News) - Shares in Fevertree Drinks plunged on Thursday after the company said margins would be hit harder than expected due to higher costs and logistics issues.
The maker of high-end tonic mixer drinks guided for margins to stay flat for 2022 and core earnings of between £69m £72m along with revenue in the range of £355m-£365m.
"Cost headwinds in 2022 will be more significant than we anticipated, and whilst we are employing a range of mitigating actions, margins are expected to remain broadly flat in 2022," the company said in a trading statement.
However, Fevertree did report higher sales in its off-trade, or non-bar, business as people consumed more cocktails at home and forecast the trend to carry on even as Covid-19 restrictions are lifted.
"We expect Off-Trade demand to remain at higher levels than pre-pandemic and are well placed to benefit from this sustained shift in consumer behaviour," the company said.
The maker of high-end tonic mixer drinks guided for margins to stay flat for 2022 and core earnings of between £69m £72m along with revenue in the range of £355m-£365m.
"Cost headwinds in 2022 will be more significant than we anticipated, and whilst we are employing a range of mitigating actions, margins are expected to remain broadly flat in 2022," the company said in a trading statement.
However, Fevertree did report higher sales in its off-trade, or non-bar, business as people consumed more cocktails at home and forecast the trend to carry on even as Covid-19 restrictions are lifted.
"We expect Off-Trade demand to remain at higher levels than pre-pandemic and are well placed to benefit from this sustained shift in consumer behaviour," the company said.