Overview
Shares of MGP Ingredients took a hit after the whiskey maker provided a cautious sales forecast for 2024, pointing to challenges such as bloated distributor inventory. Despite reporting fourth-quarter results that exceeded analyst expectations, the stock dropped by nearly 15% to $78.33 on Thursday.
Sales Projections
The Atchison, Kansas-based company is aiming for fiscal-year sales of $742 million to $756 million, falling short of the $787.8 million anticipated by analysts surveyed by FactSet. This disappointing outlook has contributed to a decline of over 18% in share value over the past year, with the stock now trading at a 52-week low.
Industry Challenges
Chief Executive David Bratcher highlighted a slowdown in the branded spirits sector following the end of the "Covid super cycle." Additionally, the lingering issue of excess inventory within wholesale distribution channels has added pressure on the industry.
Optimism Amidst Adversity
Despite these challenges, Bratcher remains optimistic about the growth prospects of American whiskey and other categories, such as tequila. The company sees potential for continued expansion even in the face of current market headwinds.
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