SodaStream Blows Out Q1 Estimates on Top and Bottom Lines

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SodaStream International Ltd. (NASDAQ: SODA) reported its first-quarter financial results before the markets opened on Tuesday. The company said it had $0.29 in earnings per share (EPS) on $100.9 million in revenue, compared to consensus estimates from Thomson Reuters of $0.11 in EPS on revenue of $89.00 million. In the same period of last year, SodaStream posted EPS of $0.40 and $91.30 million in revenue.

Gross margin for the quarter decreased to 50.7%, due to changes in foreign exchange rates compared to the same period from last year.

Note that the company did not issue guidance in this report.

Free cash flow was $4.6 million in this quarter, compared to negative free cash flow of $11.5 million in the same period last year. On the books, cash and cash equivalents totaled $34.4 million, which is similar to their value at the end of 2015.

SodaStream reported its business segments for the first quarter as follows:

  • Sparkling Water Maker Starter Kits revenue increased 13% to $29.6 million.
  • Consumables revenue increased 9% to $68.1 million.
  • Other revenue increased 22% to $3.2 million.

Daniel Birnbaum, CEO of SodaStream, commented:

Our first quarter results demonstrate that our growth plan, which centers on repositioning the SodaStream brand around sparkling water and building a stronger, more efficient organization, has started to take hold. Sales exceeded our expectations driven by strong gains in Europe as our new messaging fueled increased demand for sparkling water makers, gas refills and our enhanced flavor line in turnaround markets like France and the Nordics, while we experienced continued growth in our established countries of Germany, Austria and Switzerland. At the same time, our operating performance reflects the benefits from the consolidation of our manufacturing and logistics activities into our new state-of-the-art facility in Lehavim. We move forward focused on continuing to execute our growth plan including in the U.S. where our efforts are concentrated on developing the right marketing message and enhancing our in-store presence. We are confident that the work we are doing will lead to increased profitability and greater shareholder value over the long-term.

Shares of SodaStream closed Monday down 1% at $14.73, with a consensus analyst price target of $17.00 and a 52-week trading range of $11.40 to $24.38. Following the release of the earnings report, the stock was up over 12% at $16.55 in early trading indications Tuesday.