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SodaStream Boosts Its Outlook as Sales Growth Roars Back

By Demitri Kalogeropoulos - Aug 2, 2018 at 3:35PM

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Demand for its sparkling water machines is rising, which puts the company in a strong position heading into the holiday shopping period.

SodaStream's (SODA) management team is having trouble keeping pace with the company's quickly improving operating trends. On Wednesday, for the second straight time this year, executives raised their 2018 sales and profit outlooks following an impressive quarter that included spiking profitability and robust demand for sparkling water machines.

Let's take a closer look.


Q2 2018

Q2 2017

Year-Over-Year Change


$171.5 million

$130.6 million


Net income

$26.1 million

$14.4 million


Earnings per share




Data source: SodaStream financial filings.

What happened this quarter?

Revenue growth accelerated for the second straight quarter, jumping to over 30% thanks mainly to a surge in sales of sparkling water machines. Profitability continued its dramatic upward trajectory, too, as SodaStream benefited from a larger sales base, lower expenses, and a new direct distribution model in the key French market.

Highlights of the quarter included:

A woman drinks sparkling water from a glass.

Image source: Getty Images.

  • Sales gains clocked in at 31%, compared to 25% last quarter, as strong demand growth in Western Europe, the U.S., and China easily offset a slight decrease in Eastern Europe.
  • The key contributor to growth was a 22% increase in machine sales (compared to a 2% decline last quarter) that nearly matched the company's banner holiday season. SodaStream also notched healthy refill volume as sales of carbon dioxide canisters jumped 17% to 9.7 million units.
  • Gross profit margin jumped to 59.3% of sales from 53.1% a year ago, thanks to rising selling prices, robust sales growth, and reduced manufacturing costs.
  • The company spent slightly less on sales and marketing expenses, which, combined with the gross-profit improvement, allowed operating income to rise 89% to $32 million.
  • Tax liabilities fell, but higher interest payments led to net income growth that was slightly slower than operating income growth.

What management had to say 

CEO Daniel Birnbaum said in a press release: "We are extremely pleased to be reporting the most successful quarter in our company's history. The product, distribution, and marketing initiatives we are executing across our global portfolio of markets continue to propel our business to new heights and strengthen our foundation for future growth."

Management highlighted the robust sales growth for sparkling water machines that pushed volume over one million units, even as gas-refill sales hit a record at just under 10 million. "These results underscore the progress we are making toward our primary strategic objectives of expanding household penetration and increasing usage of our home carbonation system," Birnbaum said.

Looking forward 

Management lifted its 2018 guidance dramatically, and now sees sales rising 23%, compared to the prior target of 15% and the initial forecast for the year of about 12%. Operating income is now set to jump 44%, rather than the 15% targeted in May.

Part of these gains can be traced to foreign currency swings that are elevating reported sales and profits. But SodaStream's optimism is also based on positive operating trends such as a loyal user base that's quickly approaching 10 million homes. And with rising demand for sparkling water machines, the company is enjoying impressive momentum just as retailers are beginning to stock up for the holiday shopping season.

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