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Castle Brands (ROX) Q4 Earnings & Sales Miss Estimates

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Castle Brands Inc.’s fourth-quarter fiscal 2018 results lagged the Zacks Consensus Estimate. Despite lagging estimates, revenues improved year over year on the back of consistent growth of Jefferson’s bourbon and Irish whiskey portfolios as well as Goslings Stormy Ginger beer.

Q4 Earnings & Revenues

Castle Brands’ earnings broke even in the fourth quarter of fiscal 2018, missing the Zacks Consensus Estimate of 1 cent.

The company posted quarterly revenues of $24.1 million, which lagged the Zacks Consensus Estimate of $24.5 million by 1.7%. Revenues improved 6.6% year over year.

The company’s gross profit declined 2.1% from the prior-year quarter’s level to $9.4 million.

Adjusted EBITDA climbed 9.5% year over year to $2.3 million.

Castle Brands, Inc. Price, Consensus and EPS Surprise

 

Fiscal 2018 Highlights

Sales in the quarter under review rose 16.3% to $89.9 million driven by sales growth of whiskey portfolio, Goslings Stormy Ginger Beer and certain liqueur brands in the United States.

Whiskey revenues increased 19.7% buoyed by solid contribution from Jefferson's bourbons and Irish whiskies along with the addition of the Arran scotch whiskey portfolio. Gosling’s Stormy Ginger Beer sales surged 32.7% year over year to $26.5 million.

Adjusted EBITDA in the quarter rallied 41.9% from the year-ago quarter’s tally to $7.4 million. Castle Brands expects the trend of increasing sales and improving financial performance to continue through fiscal 2019.

The company reported earnings of 1 cent in fiscal 2018, flat year over year.

Financial Position

Castle Brands had cash and cash equivalents of $377 thousands as of Mar 31, 2018 compared with $611 thousands as of Mar 31, 2017.

Total debt at the end of fiscal 2018 amounted to $38.9 million compared with $ 34.9 million at the end of fiscal 2017.

Price Performance

Shares of Castle Brands have lost 31.4% in the past year compared with 2.1% decline of its industry. Earnings estimates for fiscal 2019 have remained stable in the last seven days.

 



Zacks Rank & Key Picks

Castle Brands has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Zacks Consumer Staples sector are The Boston Beer Company, Inc (SAM - Free Report) , The Chefs' Warehouse, Inc (CHEF - Free Report) and Medifast, Inc (MED - Free Report) .

Medifast, also a Zacks Rank #1 (Strong Buy) stock, is expected to witness 59.4% rise in earnings this year.You can see the complete list of today’s Zacks #1 Rank stocks here.

Boston Beer, a Zacks Rank #2 (Buy) stock, has a solid earnings surprise history, beating the consensus mark in three of the trailing four quarters with an average positive surprise of 41.8%. Its current-year earnings estimates have moved up 9.7% in the last 60 days.

The Chefs' Warehouse, a Zacks Rank #2 company, has an expected earnings growth rate of 65.9% for 2018.

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