US: Cott Corp. misery continues with tough Q1
Cott Corporation has seen "tough but necessary changes" fail to halt sliding sales in its first quarter.
The North American soft drinks company, which specialises in retailers' own-label brands, said today (28 April) that the operating profit of $15.5m recorded in the first quarter a year ago, turned into a $12.1m loss in the first three months of this year. The loss came on the back of a 2.6% dip in sales, to $389.7m from $400.1m. Net loss hit $20.7m, compared to a net profit of $4.8m in Q1 2007.
"Despite our pricing efforts, earnings did not meet expectations, and the turnaround process in the US is taking longer than expected," said David Gibbons, Cott's interim CEO. "The board of directors has made some tough but necessary changes that our disappointing results called for; we must improve our execution to accelerate the turnaround of the US business."
In North America, in volume terms, case sales were down by 4.5% to 156.9m cases and revenue declined by 7.1% to $274.6m, when compared to the first quarter of 2007, as a result of the continued decline in the demand for Cott's core products in the US.
The International business unit generated revenue growth of 9.9% to $115.1m compared to the prior year, with beverage case volume up 3.5% to 47.4m units. Stripping out the impact of foreign exchange, International revenue grew 8.6% as compared to the prior year.
"Our international business units delivered high single digit revenue growth, even as we recover from setbacks in the UK last year and volume softness in Mexico this quarter," Gibbons added. "Our global retailers and bottling partners rely on us for innovation in their beverage product portfolios. We look forward to introducing new beverages to new consumers in targeted international markets."
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