SodaStream Collaborates with Skinnygirl

Zacks

SodaStream International, Ltd. (SODA), leading maker of beverage carbonation systems for homes, has entered into a strategic alliance with Skinnygirl, a lifestyle company created by Bethenny Frankel, an author, chef, TV personality and entrepreneur. The companies will develop new flavors that are low in calorie, naturally sweetened, especially for women. These flavors offered under the Skinnygirl brand, will be made in SodaStream carbonation systems.

SodaStream International’s soda making systems, sold under the SodaStream brand, offer a healthier way to enjoy carbonated beverages at home. SodaStream’s products are primarily sold at retailers like Kohl’s Corp. (KSS), Macy’s, Inc. (M) and Bed Bath & Beyond, Inc. (BBBY).

Last month, the company announced dismal preliminary results for full year 2013, the final results of which are expected in February. Though the company still enjoys double-digit revenue growth, its failure to achieve the desired margins during the holiday season along with a difficult consumer spending environment and currency headwinds resulted in a disappointing outlook for 2013. In order to push its products in certain markets during the holiday season, the company had to slash its selling prices despite higher product costs. Also, the company had to offer higher discounts than planned to lure its customers. A shift in product mix also remained a headwind during the holiday season.

For 2013, SodaStream expects its revenues to be approximately $562.0 million, representing year-over-year growth of 29%, lower than the company’s earlier expectation of 30% growth. Revenues are also likely to fall short of the Zacks Consensus Estimate of $563 million.

Net income is expected to be $41.5 million in 2013, representing a year-over-year decline of 5.5% and in sharp contrast to management’s prior expectation of 23% growth. The company expects its adjusted net income to be approximately $52.5 million for 2013. The Zacks Consensus Estimate for 2013 earnings is pegged at $1.94 per share.

SodaStream International carries a Zacks Rank #5 (Strong Sell).

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