SodaStream Plans To Pump U.S. Sales With 'Health' And 'Wellness'

Samantha Sharf

Forbes Staff

Soda and healthfulness are generally seen as contradictory terms. Despite its name SodaStream, maker of “home carbonation systems,” believes it can pump up its struggling U.S. sales by turning an eye toward wellness. SodaStream shares popped about 2.4% to as high as $32.94 in Tuesday morning trading thanks in part to improved bottom line guidance as the company cuts costs and moves toward this ambitious goal.

The Israeli manufacturer reported $141.2 million in second quarter revenue, up 6.6% from the same period last year. While net income was down 28.7% to just $9.2 million this result was far stronger than the 49.6% drop Wall Street analysts were anticipating leading up to the earnings report. Earnings per share were 43 cents, beating consensus by 12 cents.

SodaStream reported sales growth in three of four geographic regions including a 14% bump in Western Europe to $77.7 million. In a statement on the results CEO Daniel Birnbaum noted that the company recorded more gas refills than ever before which he says proves the “stickiness” of SodaStream’s home carbonation system.

The Americas were the only region where the company struggled. Sales here declined 14% to $40.9 million. “In the U.S., soda maker volumes remained under pressure as we struggled to drive consumer demand and retailers worked through excess inventory carried over from the holiday season,” said Birnbaum. As a result the company lowered its sales projection for the second half of 2014.

The company now expects full year revenue to land around $590.8 million and net income around $4.1 million, both up 5% from last year. The company previously forecast 15% revenue growth but 3% net income growth. Birnbaum noted SodatStream plans to, ”reposition our brand behind health & wellness and refine our product line and marketing message to better promote this important consumer benefit. We are confident this strategy will have a positive long-term impact on our U.S. performance. Our revised plan for 2014 also includes operating expense reductions aimed at protecting profitability until growth trends improve.”