National Beverage Shares Decline Following Disappointing Quarterly Results

National Beverage Corp. shares faced downward pressure in the wake of its latest quarterly earnings release, which fell short of Wall Street’s projections. The company’s performance on both earnings per share and revenue metrics disappointed market participants who had anticipated stronger results.

Financial Performance Versus Expectations

For its fiscal first quarter, the beverage maker reported earnings of $0.60 per share, narrowly missing the consensus estimate of $0.61 among market analysts. Revenue reached a new company record of $331 million, yet this figure still came in below the anticipated $336.06 million.

The market’s reaction was swift, with the stock declining 0.8 percent following the announcement. This immediate sell-off reflected investor disappointment with the quarterly performance.

Mixed Financial Picture Emerges

A deeper examination of the financials reveals a complex situation. Net sales experienced growth driven by higher pricing and an improved product mix, though this was partially offset by a slight decrease in overall case volume.

Should investors sell immediately? Or is it worth buying National Beverage?

On a positive note, the company’s gross profit expanded by 80 basis points to reach $125 million. Operating income climbed to $71 million, while operating cash flow generation remained robust at $59 million. The company maintained strong overall liquidity with $250 million in cash and equivalents.

However, interest income declined by $2.1 million compared to the same quarter last year, directly attributable to reduced cash balances following a substantial $304 million dividend distribution in July 2024.

LaCroix Brand Shows Promise

Within the sparkling beverage segment, the company’s flagship LaCroix brand demonstrated particular strength. The brand achieved organic sales growth in the club channel, primarily fueled by its “Deliciously Magical” variety packs. Four recently introduced flavor innovations have shown promising early sales performance.

Key Financial Metrics Summary:

• Q1 EPS: $0.60 (below expectations)
• Q1 Revenue: $331 million (below expectations, but record high)
• Stock Reaction: -0.8% post-announcement
• Gross Profit: $125 million
• Operating Income: $71 million
• Total Liquidity: $250 million

Analyst Concerns Preceded Results

The disappointing quarterly figures did not come as a complete surprise to market observers. Earlier in September, UBS Group had downgraded National Beverage to a “Sell” rating while reducing its price target from $45 to $40. The financial institution cited intensified competition within the sparkling beverage market and increasing margin pressures as primary concerns behind their revised assessment.