SodaStream Warns of Weak Demand in US

 

SodaStream International, an Israeli maker of home soda machines, estimated third-quarter revenue that fell short of analysts’ expectations, citing lower-than-expected demand. Sales were hurt by a continuing struggle to gain new customers and by weak demand for its soda makers and flavors in the United States.

SodaStream said it must change its strategy and improve its execution. The company already has begun shifting the brand toward health and wellness, primarily in the U.S., where the message will resonate more strongly with consumers.

The company estimated revenue of about $125 million for the quarter ending Sept. 30, lower than the $154 million recently expected by analysts. A year ago, the company reported $145 million in third-quarter revenue. Sodastream’s share price had already fallen 4.6% yesterday to $27.57 and fell a further 17.4% in premarket trading to $22.77, giving a market cap of $577.8 million.

SodaStream CEO Daniel Birnbaum said in a statement, “We are very disappointed in our recent performance, Our US business underperformed due to lower than expected demand for our soda makers and flavors, which was the primary driver of the overall shortfall in the third quarter. While we were successful over the last few years in establishing a solid base of repeat users in the US, we have not succeeded in attracting new consumers to our home carbonation system at the rate we believe should be achieved.”

He added, “The third quarter results are a clear indication that we must alter our course and improve our execution across the board. We have already begun a strategic shift of the SodaStream brand towards health and wellness, primarily in the US, where we believe this message will resonate more strongly with consumers.”

“We firmly believe that our actions to shift the brand and improve execution will strengthen our leadership position in the home carbonation category and deliver enhanced shareholder value, ” he concluded.

 

 

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