Why National Beverage Stock Dropped, Then Popped
Key Points
National Beverage missed on earnings last night.
Shares of the LaCroix sparkling water company are feeling margin pressure as Trump tariffs eat into profits.
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National Beverage (NASDAQ: FIZZ) stock, which owns the popular LaCroix sparkling water brand, tumbled 6.3% in early trading on the Nasdaq Friday before reversing course and rising. As of 10:30 a.m. ET, National Beverage stock is back in the green -- up 1.4%.
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What happened at National Beverage today
The reason, as you might guess, is earnings. National Beverage reported its fiscal Q1 2027 results last night, and the news wasn't great. Analysts had forecast National Beverage to earn $0.59 per share in the quarter, but the most the company could muster up was $0.50.
Sales were essentially flat year over year, up less than one-tenth of one percent at $330.7 million. Profits slid nearly 17% to the aforementioned $0.50 per share. Management "blamed elevated input costs" for a steep decline in profit margins, with the gross profit margin in particular slipping to 35%. National Beverage offset higher input costs by raising prices, which depressed demand -- and volumes sold declined.
Net-net, this caused total revenue to basically not move at all.
What's next for National Beverage
Management cited a host of inflationary pressures affecting its results, from "elevated aluminum commodity costs and tariffs" subtracting "600 basis points" from margins to higher fuel and freight costs to higher ingredient costs.
Management warned that it's struggling to deal with so many complications at once, and while National Beverage is eating some tariff costs itself (hurting margins), it's also passing some costs on to its customers (hurting sales).
At a share price less than 16x earnings, the stock doesn't look particularly expensive right now. But until National Beverage figures out a solution to its woes, falling sales and falling profits mean this stock is probably going nowhere anytime soon.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends National Beverage. The Motley Fool has a disclosure policy.
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