Why Castle Brands Inc (NYSEMKT:ROX) Shares Jumped 42%

Castle Brands Inc (NYSEMKT:ROX) shares were up 42.49% on Tuesday to $1.04 and unchanged...
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Castle Brands Inc (NYSEMKT:ROX) shares were up 42.49% on Tuesday to $1.04 and unchanged in after-hours trading. Share prices have been trading in a 52-week range of $0.65 to $1.45. The company has a market cap of $161.44 million at 160.97 million shares outstanding.

Castle Brands Inc is a company that develops and markets premium and super premium brands in the beverage alcohol categories. It is engaged in the sale of premium beverage alcohol. Its beverage alcohol categories include rum, whiskey, liqueurs, vodka and tequila. It has operations in two geographic areas: International and the United States. The company distributes its products in all 50 states of the United States and the District of Columbia.

Its brands include Gosling’s rum, Gosling’s Stormy Ginger Beer, Gosling’s Dark ‘n Stormy ready-to-drink cocktail, Jefferson’s bourbon, Jefferson’s Reserve, Jefferson’s Ocean Aged at Sea, Jefferson’s Wine Finish Collection, Jefferson’s The Manhattan: Barrel Finished Cocktail, Jefferson’s Chef’s Collaboration, Jefferson’s Wood Experiment, Jefferson’s Presidential Select, Jefferson’s Rye whiskey, Pallini liqueurs, Clontarf Irish whiskey, Knappogue Castle Whiskey, Brady’s Irish Cream, Boru vodka, Tierras tequila, Celtic Honey liqueur and Gozio amaretto.

In a press release, Castle Brands Inc shared that they reached an agreement to supply Goslings Stormy Ginger Beer and Goslings Stormy Diet Ginger Beer to all U.S. Walmart stores by this month.

Supplying Walmart with both the Regular and Diet Goslings Stormy Ginger Beer adds to the brand’s impressive growth and strengthens our position in the U.S. market. We are pleased that Walmart has implemented a full store roll-out.  We look forward to working with Walmart to promote the continued success of Goslings Stormy Ginger Beer,” remarked John Glover, Chief Operating Officer of Castle Brands Inc.

Prior to this, several investment companies issued “buy” ratings on Castle Brands Inc shares while Director Richard Krasno recently acquired 30,000 shares of the company’s stock in a transaction on Tuesday, December 27th at $0.72 per share.

The agreement with Walmart, the world’s largest retailer, to supply approximately 4,500 stores with Goslings Stormy Ginger Beer, which we believe is the largest selling U.S. premium ginger beer, is an indication of the strength and growing value of the Goslings brand,” said Malcolm Gosling, President of Goslings-Castle Partners Inc.

Expectations of seeing the other brands that Castle Brands Inc carries on the Walmart shelves are buoying the company’s stock higher, although the recent arrangement could mean a strong influx of revenues this month and in the coming quarters.

Price gapped significantly higher upon seeing the announcement yesterday and is currently nearing record highs. Investor interest could continue to pick up in the coming days as the agreement bears fruit, possibly sustaining the strong bullish momentum for Castle Brands Inc stock.

Note, however, that the company’s latest earnings report showed breakeven figures even as revenues fell short of estimates. Whiskey revenues increased 14.5% from the year-ago quarter while Goslings Stormy Ginger Beer case sales increased 42.9% to approximately 339,000 cases. The company’s quarterly revenues of $18.31 million fell short of estimates at $20.74 million. Still,  revenues reflected a 6.4% year-over-year rise on U.S. sales growth of Jefferson’s bourbons, the Irish whiskies and Goslings Stormy Ginger Beer.

DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.

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