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SodaStream (SODA) Shares Rally on Q4 Earnings, Revenues Beat

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SodaStream International Ltd. came up with impressive results in the final quarter of 2017, beating the Zacks Consensus Estimate on both counts. The company’s shares gained 4.9% during the trading session on Feb 14, to close at $82.42.

SodaStream’s adjusted earnings of $1.13 per share beat the Zacks Consensus Estimate of 78 cents by 44.9%. Earnings increased a robust 58.1% year over year driven by strong revenues, improved efficiencies, solid margin and lower tax rates.


Total revenues of $157.7 million beat the Zacks Consensus Estimate of $152 million by 3.7%. Revenues rose 19.6% year over year, marking eighth consecutive quarter of double-digit growth.

The impressive top-line result was driven by a double-digit increase in revenues across all the regions, baring Central & Eastern Europe, Middle East, Africa (down 4.6%). The performance was particularly solid in the United States, Germany, Canada and Australia.

Sales rose 18.9% in Western Europe, which represented 57% of its global sales, owing to double-digit growth in Germany. Additionally, meaningful gains in Austria and Benelux also added to the positives.

SodaStream’s revenues from the Americas increased 20.7%. The sales momentum has gained once again (led by another exceptional performance in Canada) after a tepid performance last quarter. Sales increased in strong double-digits driven by more than 50% growth in sparkling water maker and gas refill sales.

In the Asia Pacific, revenues increased 30.6% year over year due to strong demand in Australia and Japan. In Central & Eastern Europe, Middle East, Africa (CCEMA), sales plunged 4.6%. Higher sales growth in Israel was offset by lower sales to the Czech distributor in the quarter, as the company shipped more products earlier in the year compared to 2016.

Margins Improve

Gross margin rose 140 basis points (bps) year over year to 53.8%. Adjusted EBITDA was $30.8 million, up 24.3% year over year. Continued production optimization, higher production volume, introduction of higher margin sparkling water makers and changes in Fx compared with the same period in 2016, led to the upside.
Operating income was $25.7 million, increasing 36.4% year over year, driven by higher operating leverage and gross margin improvement.

2017 Highlights

Total revenues came in at $543.4 million, an increase of 14.1% year over year with double-digit growth across the board. Earnings increased 59.4% to $3.29 per share from 2016 level.

2018 Outlook

Total revenues are expected to witness about 12% year-over-year increase, with approximately 2% growth to result from the acquisition of the company's French distributor. Operating income is likely to grow approximately 10% and earnings per share to increase 5%.

Zacks Rank

SodaStream carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Stocks to Consider

A few better-ranked stocks in the Consumer Discretionary sector are Party City Holdco Inc. (PRTY - Free Report) , Central Garden & Pet Company (CENT - Free Report) and Snap-on Incorporated (SNA - Free Report) .

Party City Holdco, a Zacks Rank #1 stock, is expected to witness 46.3% earnings growth this year.

Central Garden & Pet, a Zacks Rank #2 (Buy) stock, is expected to witness 26% earnings growth this year. Snap-on, also a Zacks Rank #2 company, is expected to witness 13.4% growth in earnings this year.

SodaStream International Ltd. Price, Consensus and EPS Surprise


SodaStream International Ltd. Price, Consensus and EPS Surprise | SodaStream International Ltd. Quote

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