he boss of Fevertree blamed “the vagaries of the British summer weather” as the drink mixer business warned on its profits for the year today.
Sales were up in the first half of the year, but profits were almost entirely wiped out as the price of glass to bottle Fevertree’s drinks soared.
The business has raised prices to adjust to the higher costs, but Susannah Streeter, head of money and markets at Hargreaves Lansdown, said there was a limit to how high it could raise prices: “When a product is already sold at premium prices, customers are likely to baulk at much bigger hikes, particularly when consumers have already got into the habit of trading down.”
Things only got worse in July and August, as “unseasonably poor weather” led to slow trading in the UK. As a result, the drinks maker now expects profit for the year to fall between £30 million and £36 million, down from £36-42 million.
CEO Tim Warrillow said: “Whilst the vagaries of the British summer weather have impacted sales since period end, contributing to our revised guidance for the full year, the group still expects to deliver good growth in the remainder of 2023.”
“Looking ahead to 2024, with a stronger global market position than ever before, a broader product portfolio and our confidence in delivering significant margin improvement, the group is well set up for strong, profitable growth going forward.”
Shares were resilient, only down 15.8p, or 1.2%, to 1289.2p today. They are still up 22% for the year to date.