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SodaStream (SODA) Q2 Earnings Beat; Raises Sales Outlook
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SodaStream International Ltd. reported impressive results for the second quarter of 2016, beating the Zacks Consensus Estimate on both counts. The company also raised its revenue guidance for 2016.
SodaStream’s adjusted earnings of 37 cents per share crushed the Zacks Consensus Estimate of 19 cents by 94.7%. Earnings increased a robust 117.7% year over year driven by strong revenues, improved efficiencies, solid margin and lower tax rates.
Revenues
Total revenue of $119.2 million beat the Zacks Consensus Estimate of $102 million by 17%. Sales rose 17.2% year over year.
The impressive top line result was driven by a double-digit increase in revenues across all the regions. The top-line increase was supported by marketing programs, which aimed at household penetration and drove sparkling water makers' sales. The company reported strong demand for sparkling water makers and consumables in Germany, Canada, Japan, France and South Korea.
After reporting weak sales results for some time due to low demand for its products, this Zacks Rank #1 (Strong Buy) company reported strong sales and margins in the first two quarters of 2016. SodaStream’s products are primarily sold at major retail stores like Kohl’s, Corp. (KSS - Free Report) , Macy’s, Inc. (M - Free Report) and Bed Bath & Beyond, Inc. .
The company achieved better sales and profits in the first two quarters on the back of new flavors on the shelf and improved efficiency and operating performance from the fully-functional Lehavim production facility.
Sales rose 14% in Western Europe, owing to double-digit growth in Germany. The company’s marketing efforts fueled demand for its products in markets like France and the Nordics. Moreover, sales remained strong in countries like Germany, France and Switzerland.
SodaStream’s revenues from the Americas increased 12% on the back of strong growth in Canada and rebound in the U.S.
In the Asia Pacific, revenues increased 44% year over year due to very strong demand in Japan.
In Central & Eastern Europe, Middle East, Africa (CCEMA) sales surged 32%, primarily on higher sales of sparkling water makers, flavor and gas refills to the Czech distributor and robust growth in Israel.
Margins Improve
Gross margin rose 40 basis points (bps) year over year to 50.7%. Adjusted EBITDA was $15.4 million, up 73% year over year. The consolidation of manufacturing and logistics into the company’s latest state-of-the-art facility in Lehavim improved operating efficiencies and drove gross margin increase.
Operating income was $9.2 million, up 102% year over year, driven by higher operating leverage and gross margin improvement.
Total revenue for 2016 is expected to witness a high single digit year-over-year increase, better than the prior expectation of a slight year-over-year increase. Gross margin in 2016 is expected to rise 250 bps compared with the previous expectation of 200 bps increase from the fourth-quarter rate of 48%.
Advertising/promotion costs, as a percentage of revenues, are still expected to go up roughly 150 bps from the 2015 levels as the company works toward driving consumer demand for new products.
Adjusted operating income is expected to increase 45%, better than the prior expectation of slightly above 2015 levels.
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SodaStream (SODA) Q2 Earnings Beat; Raises Sales Outlook
SodaStream International Ltd. reported impressive results for the second quarter of 2016, beating the Zacks Consensus Estimate on both counts. The company also raised its revenue guidance for 2016.
SodaStream’s adjusted earnings of 37 cents per share crushed the Zacks Consensus Estimate of 19 cents by 94.7%. Earnings increased a robust 117.7% year over year driven by strong revenues, improved efficiencies, solid margin and lower tax rates.
Revenues
Total revenue of $119.2 million beat the Zacks Consensus Estimate of $102 million by 17%. Sales rose 17.2% year over year.
The impressive top line result was driven by a double-digit increase in revenues across all the regions. The top-line increase was supported by marketing programs, which aimed at household penetration and drove sparkling water makers' sales. The company reported strong demand for sparkling water makers and consumables in Germany, Canada, Japan, France and South Korea.
After reporting weak sales results for some time due to low demand for its products, this Zacks Rank #1 (Strong Buy) company reported strong sales and margins in the first two quarters of 2016. SodaStream’s products are primarily sold at major retail stores like Kohl’s, Corp. (KSS - Free Report) , Macy’s, Inc. (M - Free Report) and Bed Bath & Beyond, Inc. .
The company achieved better sales and profits in the first two quarters on the back of new flavors on the shelf and improved efficiency and operating performance from the fully-functional Lehavim production facility.
Sales rose 14% in Western Europe, owing to double-digit growth in Germany. The company’s marketing efforts fueled demand for its products in markets like France and the Nordics. Moreover, sales remained strong in countries like Germany, France and Switzerland.
SodaStream’s revenues from the Americas increased 12% on the back of strong growth in Canada and rebound in the U.S.
In the Asia Pacific, revenues increased 44% year over year due to very strong demand in Japan.
In Central & Eastern Europe, Middle East, Africa (CCEMA) sales surged 32%, primarily on higher sales of sparkling water makers, flavor and gas refills to the Czech distributor and robust growth in Israel.
Margins Improve
Gross margin rose 40 basis points (bps) year over year to 50.7%. Adjusted EBITDA was $15.4 million, up 73% year over year. The consolidation of manufacturing and logistics into the company’s latest state-of-the-art facility in Lehavim improved operating efficiencies and drove gross margin increase.
Operating income was $9.2 million, up 102% year over year, driven by higher operating leverage and gross margin improvement.
SODASTREAM INTL Price, Consensus and EPS Surprise
SODASTREAM INTL Price, Consensus and EPS Surprise | SODASTREAM INTL Quote
2016 Outlook Raised
Total revenue for 2016 is expected to witness a high single digit year-over-year increase, better than the prior expectation of a slight year-over-year increase. Gross margin in 2016 is expected to rise 250 bps compared with the previous expectation of 200 bps increase from the fourth-quarter rate of 48%.
Advertising/promotion costs, as a percentage of revenues, are still expected to go up roughly 150 bps from the 2015 levels as the company works toward driving consumer demand for new products.
Adjusted operating income is expected to increase 45%, better than the prior expectation of slightly above 2015 levels.
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