Over 1,000 Starbucks Locations Across Canada Are Now Selling Flow Spring Water — What Does That Mean For Flow Beverage Corp's Stock?

Flow Beverage Corp FLOW FLWBF (“Flow”) reported its Q2 earnings on June 14, with many investors having expected additional revenue growth following the sustainable and functional water company’s new distribution agreement with Starbucks SBUX that took effect this year. 

Shares of the stock were trending up in the first months of the year. Despite dipping in late March and April along with Canadian and U.S. markets, notably in the aftermath of the banking crisis, the stock is still up about 50% year-to-date as of this writing. 

Nationwide Canadian Starbucks Distribution Agreement Adds To Flow’s Growing Distribution Network

Announced in December, the distribution agreement put cartons of Flow Alkaline Spring Water and Flow Strawberry Rose in over 1,000 Starbucks locations across Canada starting in January. “Flow has achieved another major milestone in its retail growth strategy securing distribution in Canada with the premier roaster and retailer of specialty coffee in the world,” said Chairman and CEO of Flow, Nicholas Reichenbach.

Flow already reported a strong first quarter, with 40% net revenue growth thanks to added retail locations as well as the company’s expanded portfolio of premium functional waters. Between the new Starbucks deal, an expanded distribution agreement with Costco COST, and another major distribution deal signed with Foodbuy Foodservice, the sustainable beverage company has already increased its in-store distribution by 88% year over year.

The company expects that expanded retail footprint to help the Flow brand gain traction this year, and it already commands a 45% market share in the carton format water segment in the United States. “All told, we believe fiscal 2023 will be a transformational year on the path toward our goal of achieving sustainable profitable growth of the Flow brand,” said Reichenbach in a statement on the company’s Q1 earnings results.

With the additional revenue potential from the Starbucks deal and other major distribution agreements and the working capital improvements that are expected to impact the company’s balance sheet as soon as the second half of this year, analysts have set price targets for the stock ranging from $1.25 to $2.50. Even at the low end of that range, those price targets still represent upside potential for the stock. 

Featured photo by Dom J on Pexels.

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