US: Slowing volumes hit Castle Brands in Q3
Castle Brands has reported a steep rise in net loss for its third fiscal quarter, as falling volumes have hit the bottom line.
The US-based spirits developer and marketer said today that net loss for the three months to the end of December almost doubled to US$6.9m from $3.7m in the corresponding period a year earlier. Operating loss followed suit, up to $7.2m from $4.5m, while sales headed in the opposite direction, slipping to $6.4m from $7.4m in Q3 2006.
While case sales in the third quarter fell by 5%, Internationally the company saw case sales drop more markedly, by 46%. The International decline was blamed on a change in distributors in its largest international market, the Republic of Ireland. Global case sales in the third quarter subsequently dropped by 24% to 69,534 nine-litre cases.
For the first nine months of the fiscal year, Castle's net loss increased to $14.5m from $12.0m, although sales performed well, up to $20.9m from $19.1m.
"Given the fact that Castle Brands is still a relatively small company, short term volatility is expected, as the timing of certain purchases by our customers will have an amplified effect on our quarterly volumes," said company president and COO, Donald Marsh.
"We remain focused on several initiatives that we have underway to drive revenue growth in both the US and Europe," Marsh added. "Additionally, we plan to place an increased focus on adding agency brands."
Among the brands Castle handles are Boru vodka, Gosling's rum and Pallini Limoncello.
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