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Sagging sales volume in Snapple and other juices weighed on Dr Pepper Snapple in its latest quarterly earning as increasingly health-conscious consumers continue to opt-out of sugary drinks.
The Plano, Texas-based company reported a 1 per cent decrease in non-carbonated volume, with a 5 per cent drop on Hawaiian punch, a 3 per cent decline in Snapple and a 2 per cent loss on Mott’s apple juice.
In the carbonated drinks division, volume rose 1 per cent helped by a 7 per cent gain in sales of Schweppes gingerale in the US. Still the company has sought to offset stagnant growth in its flagship brands with a a push into flavoured water. It acquired Bai Brands last year for $1.7bn and the deal – which closed last month – has helped boost sales in its water category by 18 per cent during the quarter.
Net income for the quarter was below expectations, due to an early extinguishment of debt and the strong dollar. The group reported net income of $165m, or 90 cents per share, in the fourth quarter, down 1 per cent from the period one year ago. It was shy of expectations of $195m, or $1.05 per share.
Revenue, however, was in line with estimates at a 2 per cent increase to $1.5bn for the quarter, while net sales for the 2016 fiscal year actually beat its previous guidance, with a 3 per cent increase to $6.4bn.
“In a continuously competitive environment, we remained focused on our integrated communication and execution strategies and unlocked growth across our priority brands,” said Larry Young, president and chief executive. “We also remained relentlessly focused on driving growth and productivity across our business.”
The company said it expects organic volume to grow 1 per cent in 2017 and for total volume to grow close to 2 per cent once sales from Bai are factored in.
Shares in the company fell 1.4 per cent to $92.19 in early trade.