ISRAEL/US: SodaStream sales drive continues but Q1 profits drop
- Q1 net profits down 85% to US$1.8m
- Net sales flat at $118.2m
- Operating profits down 83% to $2.3m
- Americas sales fall 28%
SodaStream has been linked with Starbucks
SodaStream has posted a marked drop in Q1 profits after falling sales in the US and higher marketing spend hit the bottom line.
Net profits in the three months to the end of March were down 85% to US$1.8m, the home carbonation company said today (14 May). Net sales were flat at $118.2m over the same period while operating profits plunged by 83% to $2.3m.
SodaStream CEO Daniel Birnbaum said the drop in profits had been anticipated and was because of a decrease in sales of soda machines in the US over a “challenging holiday season”.
Sales in the Americas fell by 28% in the quarter, however Western Europe sales grew by 17% and Asia-Pacific by 28%.
“Our global base of SodaStream users inclusive of the US remains very active, evidenced by strong consumable sales growth, giving us added conviction in the attractiveness of our home carbonation system,” Birnbaum added.
Sales and marketing expenses increased by $7m compared to a year prior. In February, SodaStream aired a changed Super Bowl advert after broadcasters rejected its first submission.
Today's Q1 results chime with SodaStream's 2013 performance, when profits fell despite an increase in sales. In January, Birnbaum issued a profits warning, blaming a weak holiday sales period and higher production costs for the poor performance.
The challenges have not stopped speculation that SodaStream is to be bought - last month an Israeli newspaper reported that Starbucks is looking to take a 10% stake.
To read the company's official statement, click here.
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