Few investors were enjoying the taste of National Beverage (FIZZ 0.76%) stock this week. Following the company’s quarterly double miss, one analyst reiterated his sell rating on the shares, and investors took this to heart by trading them down by just over 10%, according to data compiled by S&P Global Market Intelligence.
Perhaps best known for the trendy La Croix brand of flavored waters, National Beverage’s fizz started to dissipate late last week following the release of those quarterly figures.
Although the company’s fiscal first quarter of 2023 net sales grew on a year-over-year basis, they did so only marginally — by 2% to $318 million. They also fell well short of the average analyst estimate of just under $332 million. Worse, net income suffered a 34% decline to land just shy of $35.5 million, or $0.38 per share. Again, that didn’t come close to the average prognosticator forecast, which was $0.52.
One analyst who remains unimpressed by National Beverage is UBS‘ Sean King. On Monday, while firmly keeping his sell recommendation on the stock in place, he lopped $1 off his price target to $42 per share. King pointed out that cost pressures affected the company’s profitability, and is concerned that it will continue to struggle with margins.
La Croix was quite a trendy beverage several years ago, although it likely lost some ground during the pandemic when many opted for more familiar comfort food and drinks (Coca-Cola and the like). Compounding that, National Beverage was rather circumspect with its latest earnings report, and investors are probably concerned about that lack of detail.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends National Beverage and recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.