C&C Group, the Irish maker of Magners cider, said operating profit will miss analysts’ estimates this fiscal year as sales of the cider fall and competition from rival brands increases.
Operating profit will fall to about €90 million in the year ending February 28th, from €124.2 million a year earlier, Dublin-based C&C said today in a statement.
Analysts expected earnings of about €103 million, according to the median of seven estimate compiled by Bloomberg.
C&C in November appointed John Dunsmore as chief executive officer to help reverse a slump in sales. Revenue from continuing operations fell 13 per cent in the three months ended November 30th, the company said today, led by a 19 per cent drop in cider sales.
The beverage maker relies on cider for almost 75 per cent of revenue after selling its soft-drink unit in 2007.
"The performance reflects very weak consumer demand" and competition in Britain and Ireland, the company said in the statement. "Margins were considerably weaker as a result of continuing competitive pressure." The operating margin fell about 3 percentage points during the quarter.
The traditionally weaker months of January and February are likely to "continue this trend," C&C said. The company's profit forecast refers to continuing operations before one-time items and currency fluctuations.
Bloomberg