Food and beverage supplier MGP Ingredients (NASDAQGS:MGPI) announced better-than-expected results in Q2 CY2024, with revenue down 8.7% year on year to $190.8 million. On the other hand, the company's full-year revenue guidance of $749 million at the midpoint came in slightly below analysts' estimates. It made a non-GAAP profit of $1.71 per share, improving from its profit of $1.49 per share in the same quarter last year.

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MGP Ingredients (MGPI) Q2 CY2024 Highlights:

• Revenue: $190.8 million vs analyst estimates of $189.1 million (small beat)

• EPS (non-GAAP): $1.71 vs analyst estimates of $1.54 (10.9% beat)

• The company reconfirmed its revenue guidance for the full year of $749 million at the midpoint

• EPS (non-GAAP) Guidance for the full year is $6.18 at the midpoint, roughly in line with what analysts were expecting

• Gross Margin (GAAP): 43.6%, up from 36.5% in the same quarter last year

• Free Cash Flow was -$3.82 million compared to -$2.40 million in the previous quarter

• Market Capitalization: $1.80 billion

Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQGS:MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry

Beverages and Alcohol

These companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the explosion of alcoholic craft beer drinks or the steady decline of non-alcoholic sugary sodas. Companies that spend on innovation to meet consumers where they are with regards to trends can reap huge demand benefits while those who ignore trends can see stagnant volumes. Finally, with the advent of the social media, the cost of starting a brand from scratch is much lower, meaning that new entrants can chip away at the market shares of established players.

Sales Growth

MGP Ingredients is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefitting from better brand awareness and economies of scale. On the other hand, one advantage is that its growth rates can be higher because it's growing off a small base.

As you can see below, the company's annualized revenue growth rate of 17.4% over the last three years was impressive for a consumer staples business.

This quarter, MGP Ingredients reported a rather uninspiring 8.7% year-on-year revenue decline to $190.8 million in revenue, in line with Wall Street's estimates. Looking ahead, Wall Street expects revenue to decline 1.8% over the next 12 months.