November 20, 2019 / 7:40 AM / 23 days ago

Fevertree Drinks warns on revenue as UK retail spending cools

FILE PHOTO: Products from the drinks company Fever Tree are displayed in London, Britain May 11, 2016. REUTERS/Neil Hall

(Reuters) - Premium tonic water maker Fevertree Drinks Plc (FEVR.L) on Wednesday warned on its annual revenue as Britons spent less on its mixers sold in retail stores, even as other regions, especially the United States, performed well.

The company’s shares fell as much as 8% in choppy trade, before recovering.

Fevertree now expects revenue of 266 million pounds ($343.51 million) to 268 million pounds for the year ending Dec. 31, missing analysts’ consensus of 275 million pounds, according to brokerage Jefferies.

In its interim results in July, the company forecast full-year revenue in line with expectations.

Retailers in UK have faced slack consumer spending as the country grapples with economic uncertainty against the backdrop of Brexit. A survey last month showed people spent money on entertainment and experiences, rather than in shops.

Fevertree, named after the colloquial term for the cinchona tree, the bark of which produces tonic water ingredient quinine, said its business that supplies mixers to hotels and pubs in UK performed well in the second half of the year.

The company in July had also pointed to wet weather dampening its sales following a boost from a hot British summer that fuelled sales of tonic water.

Fevertree, which has been targeting growth in the United States, said sales in the country accelerated in the second half as it built its distribution channel.

Reporting by Pushkala Aripaka in Bengaluru; Editing by Shounak Dasgupta

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