CANADA: Cott undoes good Q1 work with tough Q2
Cott Corporation has posted a sharp slide in profit for its second quarter.
The Canada-based retailer brand soft drink provider said yesterday (19 July) that operating income for the three months to the end of June plunged to US$6.2m from $23m in the corresponding period a year earlier. Sales for the period were also down, though less markedly, to $498.4m from $502m.
While volumes dipped by 6.4% to 340.3m eight-ounce equivalent cases, the company blamed the continued declines in the carbonated soft drink segment in North America, ongoing product rationalisation, and the impact of increased pricing by some US customers.
"Continued weakness in the North American carbonated soft drink segment and higher commodity costs, which we were not able to offset with pricing until just after the end of the quarter, impacted our overall results," said Cott's CEO, Brent Willis.
"We are disappointed in the second quarter, but we have taken the right actions for full-year performance, including price increases across customers in North America and Mexico, additional headcount and cost reduction initiatives, and the right investments in sales, marketing, distribution and our international business."
While North America proved problematic, the company noted that its International unit delivered revenue growth for the second quarter of 14.3% year-on-year, with the UK, Europe and Mexico businesses each contributing double-digit growth.
For the year to date, operating income was down to $21.8m from $30.7m, with sales up to $898.7m from $896.2m.
Earlier this year, Cott posted a return to profitability in the first quarter. Net income in the first three months of the year reached $4.3m compared to a loss of $2m in the year-earlier quarter.
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