Cott suffers loss in Q1
April 28, 2008
by Jeff Gelski
TORONTO — Cott Corp. suffered a loss of $20.7 million for the first quarter ended March 29 as beverage volume and sales both declined. The loss compared with net income of $4.8 million in the previous year’s first quarter.
"Despite our pricing efforts, earnings did not meet expectations, and the turnaround process in the U.S. is taking longer than expected," said David T. Gibbons, interim chief executive officer, when results were reported April 28. "The board of directors has made some tough but necessary changes that our disappointing results called for. We must improve our execution to accelerate the turnaround of the U.S. business."
Mr. Gibbons was named interim c.e.o. on March 24 when Toronto-based Cott terminated the employment of Brent Willis as c.e.o.
In the first quarter, revenues dropped more than 2% from the previous year to $389.7 million primarily because of case volume decline in North America and RC International. First-quarter filled beverage volume on 8-oz equivalent cases was down more than 5% from the prior year. Price increases implemented in 2007 and international beverage case volume growth partially offset case volume decline.
First-quarter gross margin decreased to 10.5% from 13.4% because of higher ingredient and packaging costs, higher bottled water mix and lower volume in North America, all partially offset by price increases.
Going forward, Cott plans to focus on new products in the growing categories of ready-to-drink teas, nutrient-infused water and energy drinks.