US: Losses mount at Jones Soda
Jones Soda has reported a net loss of US$5.3m for the third quarter, as the economic downturn bites the US soft drinks sector.
Jones, which last month announced it planned to cut 38% of its workforce, said yesterday (6 November) that the loss compared to a loss of $1.5m in the third quarter of 2007.
Net revenue in the three months to the end of September fell to $8.7m, down from $11.7m in the same period last year. Sales were hampered by the loss of a contract with Wal-Mart.
The results round off a poor trading period for soft drinks in North America. Canada-based Cott corporation said this week that revenue and volumes declined by 6% and 8% respectively during the third quarter of 2008, while a one-off charge saw net loss plunge to $87.6m, compared to a loss of $5.8m a year earlier.
Jones Soda CEO Stephen Jones said: "During the third quarter we were up against tough sales comparisons due to the national roll-out of Jones Soda cans in the third quarter of 2007."
He said the economic downturn had created a "challenging" market, but remained positive on the group's ability to restore growth by aggressively cutting costs.
In addition to job cuts, expected to save $2.6m annually, Jones said: "We improved our controls over promotion allowances, reducing our monthly spend by 48% in the current quarter versus the first half of 2008, and we expect this level to decline even further beginning next year."
He added that the firm has also reduced operating expenses, creating an extra $540,000 in annual savings.
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Struggling soft drinks group Cott Corp has said it is pleased to be done with 2008, after seeing losses rise by around 75% for the year....
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