Poor weather causes Fever-tree sales to go flat – London Business News | Londonlovesbusiness.com

Fever-tree has announced its half-year results and revenue was flat at constant currency, with the US up 10% but the UK seeing a 6% sales decline.

Profit margins bounced back meaning Adjusted EBITDA increased by 79% and the group now expects full-year revenue growth of c. 4-5% with on-going margin improvement.

Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club said, “It seems like Fever-tree can’t catch a break at the moment. After an annus horribilis in 2023, 2024 was supposed to be the year when sales came roaring back.

“Instead, bad weather in the UK and Europe and delayed ordering has resulted in broadly flat sales in the first half.

Unfortunately, it’s not just the weather that has caused sales to lose their fizz.

Weak consumer sentiment and a normalisation of alcohol consumption following the pandemic has impacted the whole spirits and mixer category. The upshot is that Fever-tree expects sales to grow only 4-5% this year, versus previous expectations of closer to 10% growth.

It isn’t all bad news. A significant easing of cost pressures has led to a big improvement in margins. With inflation continuing to moderate, this trend looks like it could continue. The weather Gods were also more kind in July and August, meaning the second half has got off to a better start.

However, what Fever-tree really needs to get sales fizzing is a recovery in the wider spirits and mixer category. And there is no sign of that yet.”