LaCroix maker's stock tumbles as CEO blames 'injustice' for poor sales
Shares of the maker of LaCroix sparkling water were plunging Friday after its CEO blamed its poor quarterly results on an "injustice."
In a statement, National Beverage Corp. CEO Nick Caporella told investors that they "are truly sorry" for their poor results, which were well below forecasts and added that "negligence nor mismanagement nor woeful acts of God were not the reasons."
"Much of this was the result of injustice!" Caporella said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FIZZ | NATIONAL BEVERAGE | 48.56 | -1.06 | -2.14% |
The 82-year-old chief then compared his job of managing a brand to caring for someone who is handicapped.
"Managing a brand is not so different from caring for someone who becomes handicapped. Brands do not see or hear, so they are at the mercy of their owners or care providers who must preserve the dignity and special character that the brand exemplifies," he added.
The statement comes as both Caporella and LaCroix have been under fire in recent months.
Last July, Caporella was accused of inapproprate touching two pilots, who both slapped the billionaire with lawsuits alleging harassment. Caporella and National Beverage have denied the allegations but shares were impacted by the reports.
Then in October, LaCroix was hit by a class-action lawsuit that claimed its sparkling water was not "100% natural" and has been falsely advertised.
The suit alleges that the company's water actually contains numerous artificial ingredients such as linalool, which is commonly found in cockroach insecticide.
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However, National Beverage fought back against the allegations and released a statement saying the suit was filed “without basis in fact or law regarding the natural composition of its LaCroix sparkling waters.”
LaCroix's profit plunged 39.6 percent to $24.8 million in the quarter ended Jan. 26, while sales slipped 2.9 percent to $220.9 million.
The company added that while gross margins were also impacted by volume declines, comparisons were further skewed by the adoption of the new tax act in the third quarter of the prior year, which included credits and rate reduction adjustments aggregating $11.3 million.
However, it concluded that "nothing herein mentioned has detracted from the ultimate value and future of our dynamic company."