National Beverage Stock Slides on Q2 Earnings and Revenue Miss
The maker of LaCroix sparkling water cited cautious consumer spending and failed to provide quantitative guidance, creating investor uncertainty.
Shares of National Beverage Corp. (NASDAQ: FIZZ) fell on Friday after the company reported second-quarter financial results that failed to meet analyst expectations for both earnings and revenue. The stock declined by 3.18%, closing at $33.85, as investors reacted to signs of weakening consumer demand and a lack of forward-looking financial guidance.
The Fort Lauderdale-based beverage company announced quarterly earnings of $0.49 per share, missing the consensus estimate of $0.515 by nearly 5%. Revenue for the quarter came in at $288.3 million, falling short of the $292.7 million analysts had projected and representing a 1% decrease from the same period last year, as reported by Investing.com.
In a statement accompanying the results, management attributed the underperformance to a challenging economic climate. The company pointed to persistent inflation and 'cautious' consumer spending habits as key factors impacting its performance. While pricing adjustments reportedly led to a modest increase in operating profit, a 6% decline in case volume highlighted the pressure on sales.
The results expose the challenges facing National Beverage, whose flagship LaCroix brand operates in the highly competitive sparkling water market. Once a dominant force, LaCroix now contends with a wide array of competitors, from private-label brands to offerings from beverage giants like PepsiCo (Bubly) and Coca-Cola (AHA). With consumer budgets tightening, brand loyalty is being tested across the sector.
According to the company's 8-K filing with the SEC, no quantitative forward guidance was provided, a move that adds a layer of uncertainty for shareholders and the market. This omission suggests a lack of visibility into the upcoming quarters, further weighing on investor sentiment.
Analyst sentiment remains cool on the stock. Before the earnings release, UBS had already adjusted its price target for National Beverage Corp. down to $35 from $39 while maintaining a 'Sell' rating. The consensus rating among analysts covering the stock is a 'Reduce', reflecting concerns about its growth trajectory in the current macroeconomic environment. The stock is now trading near its 52-week low of $32.21.
Investors will be closely watching for signs of a rebound in case volume and any strategic shifts from management to navigate the ongoing consumer spending slowdown. Without a clear forecast from the company, the market is left to weigh the resilience of its brands against persistent economic headwinds.