Cott earnings fall on higher commodity costs
May 2, 2012
TORONTO — Higher commodity costs, especially for fruit and fruit concentrates, sweeteners and resin, contributed to a decline in first-quarter earnings at Cott Corp. Net income in the first quarter of fiscal 2012 ended March 31 was $5.9 million, equal to 6c per share on the common stock, down 13% from $6.8 million, or 7c per share, in the first quarter of fiscal 2011.
Net revenue also declined, easing 2% to $523.8 million from $534.1 million. Cott attributed the decline to smaller North America volumes due primarily from exiting certain low margin case pack water business and the continuing decline in the U.S. shelf stable juice market.
“I’m pleased with the overall financial performance during the quarter, despite continued commodity pressures,” said Jerry Fowden, chief executive officer. “Gross margin in the first quarter improved 270 basis points from the fourth quarter of 2011, reflecting the implementation of our 2012 strategy of gradual gross margin restoration by focusing on operational efficiencies and adjusting the balance between volume and margin.”
Operating income in North America was $17.3 million, down 17% from $20.8 million in the same period a year ago. Revenue in the region also fell, easing 5% to $408.1 million from $428.8 million.
North America filled beverage case volume decreased 8% to 156.4 million cases, Cott said.
In addition to its financial results, Cott announced plans to buy back up to $35 million in common shares over a 12 month period.
“We are pleased to be able to announce this share repurchase program as an excellent way to return value to our shareowners,” Mr. Fowden said.