Unpacking Q3 Earnings: MGP Ingredients (NASDAQ:MGPI) In The Context Of Other Beverages, Alcohol, and Tobacco Stocks

In This Article:

MGPI Cover Image
Unpacking Q3 Earnings: MGP Ingredients (NASDAQ:MGPI) In The Context Of Other Beverages, Alcohol, and Tobacco Stocks

As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the beverages, alcohol, and tobacco industry, including MGP Ingredients (NASDAQ:MGPI) and its peers.

These companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the rise of cannabis, craft beer, and vaping or the steady decline of soda and cigarettes. Companies that spend on innovation to meet consumers where they are with regards to trends can reap huge demand benefits while those who ignore trends can see stagnant volumes. Finally, with the advent of the social media, the cost of starting a brand from scratch is much lower, meaning that new entrants can chip away at the market shares of established players.

The 13 beverages, alcohol, and tobacco stocks we track reported a mixed Q3. As a group, revenues missed analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 2.7% below.

Thankfully, share prices of the companies have been resilient as they are up 6.8% on average since the latest earnings results.

MGP Ingredients (NASDAQ:MGPI)

Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQ:MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry

MGP Ingredients reported revenues of $161.5 million, down 23.7% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a decent beat of analysts’ EBITDA estimates but a miss of analysts’ gross margin estimates.

“Our third quarter performance was in line with the preliminary results we provided on October 17. In response to the softening American whiskey category trends and elevated industry-wide barrel inventories, in 2025 we plan to further lower our net aging whiskey put away, scale down our whiskey production, and optimize our cost structure to mitigate lower production volumes. While current market dynamics will likely have an even greater impact on our Distilling Solutions segment sales and profitability in 2025, we believe that these actions will strengthen the long-term competitive positioning of our brown goods business. Over the longer term, we remain confident in our Distilling Solutions business as our whiskey inventories remain an important part of the still expanding American whiskey category,” said David Bratcher, CEO and president of MGP Ingredients.

MGP Ingredients Total Revenue
MGP Ingredients Total Revenue

Unsurprisingly, the stock is down 20.2% since reporting and currently trades at $44.92.