The Fevertree Drinks (LSE: FEVR) share price has been on a roll in recent months. A fresh spurt upwards has taken gains over the past 12 months to a chubby 51%. UK share investors have piled in again on Thursday following the release of full-year financials.
At £26.90 per share, the share price is trading 5% higher today. It struck two-year peaks of £27.09 earlier in Thursday trading.
Fevertree share price rises as sales soar
In today’s update, Fevertree advised that it continued to enjoy robust demand at the beginning of 2021.
The company said that the performance of its off-trade channel had “remained strong” during the first four months of 2021. In the UK, sales were up 10.1% year-on-year during the 13 weeks to 18 April. This is even though the period overlapped the first Covid-19 lockdown of 2020 when huge customer stockpiling was taking place.
Fevertree said that sales of its premium mixers continued to grow ahead of the broader market in the period to mid-April. It’s a performance that it said indicates “the strength of the brand, the success of the new flavours and formats which we launched last year, and the marketing campaigns we have continued to invest in.”
Making progress overseas
Fevertree’s soaring share price today was also helped by news of stratospheric sales growth in its foreign marketplaces.
In the US, off-trade sales ballooned 38.2% year-on-year during the 12 weeks to 27 March. Fevertree said that turnover rocketed due to “increased at-home consumption” as well as an increase in trial and repeat purchases following price optimisation steps taken last year.
The company noted as well that it continues to make “encouraging progress” in its European off-trade market. It said that it has continued to build “on the strong sales and value share gains during 2020 across key markets” there. Elsewhere, Fevertree lauded the “strong progress” it continues to make in Australia’s off-trade market. And the firm said that it has seen “a good recovery in suburban areas” for its on-trade operations. The company continues to perform strongly in Canada, it said.
A bright outlook
Fevertree said that it expects off-trade sales to transition to on-trade as coronavirus restrictions are rolled back and the hospitality sector reopens. But it added that “it is clear that at-home consumption of long mixed drinks is becoming increasingly established, supported by both the retailers and spirit companies.”
The beverages giant added that while “reopening is going to vary between markets, our brand strength and the relationships we have with our on-trade partners makes us well placed to benefit from [the] return over the rest of the year.”
City analysts think annual earnings at Fevertree will rise 18% in 2021. This leaves the company trading on a forward price-to-earnings (P/E) ratio of 64 times. Another 29% bottom-line rise is predicted for 2022.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Fevertree Drinks. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.