What Happened: Shares of food and beverage supplier MGP Ingredients (NASDAQGS:NASDAQ:MGPI) jumped 6.8% in the afternoon session after the company reported first-quarter results that beat analysts' revenue and EPS expectations. However, sales declined by 15% (otherwise flat) in absolute terms due to the closure of the Atchison distillery. The closure is anticipated to be a headwind to growth and was baked into the full-year revenue guidance, which came in below expectations. However, it maintained full-year EPS guidance, which is in line with expectations. Overall, it was a decent quarter for the company showing that the business is staying on track.
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What is the market telling us: MGP Ingredients's shares are not very volatile than the market average and over the last year have had only 7 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago, when the company dropped 17.4% on the news that the company reported fourth-quarter results and provided full-year revenue guidance that fell below analysts' expectations. The weak guidance likely reflects uncertainty regarding the macro picture, with the company highlighting several industry headwinds. Management added that "we continue to monitor the potential impact of inventory levels at distributors, overall American whiskey supply and consumption patterns, and inflation on consumers."
On the other hand, MGP Ingredients blew past analysts' EPS expectations during the quarter. Its revenue also outperformed Wall Street's estimates. In particular, the company's premium branded spirits portfolio grew by an astonishing 50% year on year. Overall, it was a mixed quarter, with the market likely worried about the weak guidance.
MGP Ingredients is down 16% since the beginning of the year, and at $82.46 per share it is trading 33.3% below its 52-week high of $123.62 from August 2023. Investors who bought $1,000 worth of MGP Ingredients's shares 5 years ago would now be looking at an investment worth $1,194.