Castle Brands sees sales slide in Q3

Castle Brands experienced a 6.4% net sales decrease during its third quarter but expects an uplift in sales in Q4 when its more premium Jefferson’s Bourbon bottlings return to market.

Jefferson’s Presidential Select was a limited edition release

For the period ending 31 December 2018, net sales dropped to US$22.5 million compared to US$24.1m for the same period the previous year.

The third quarter was also “negatively impacted” due to a one-time US$1m increase in professional fees.

Richard J Lampen, president and chief executive officer of Castle Brands, said: “Our third quarter, and as a result our nine months, were adversely affected by two atypical factors.

“First, while the overall case sales of Jefferson’s rose 20.7% in the nine months, the case mix in the third quarter was skewed toward our lower price and lower margin expression, Jefferson’s Small Batch.

“In contrast, our prior-year third quarter included US$2.5 million in sales of our limited release, high-margin Jefferson’s Presidential Select. We expect this situation to reverse in the fourth quarter as several Jefferson’s expressions with significantly higher prices and margins, such as Jefferson’s Pichon Baron and Jefferson’s Ocean Cask Strength, become available.

“Second, our third quarter results were also negatively impacted by a one-time US$1 million increase in professional fees.

“Setting aside the case mix in the third quarter, we expect the strong growth in Jefferson’s to continue to drive our long-term trends of increasing sales and improving financial performance.”

For the nine months ending 31 December 2018, net sales grew 4.7% to US$68.9m, compared to US$65.8m the previous year.

On a trailing 12-month basis, Goslings rum grew 9.9% to reach US$47.4m in revenue. Goslings Stormy Ginger Beer passed 1.85m cases – a 7.4% increase over the same 12-month period.