MGP Ingredients Q3 sales fall 10% to US$117.9M
Lower brown goods volumes weighed on earnings, while Ingredient Solutions recorded sales growth and the company maintained its full-year 2026 financial guidance.
USA – MGP Ingredients reported a 10% decline in third-quarter 2026 sales to US$117.9 million, as lower brown goods sales in Distilling Solutions and reduced international private-label bottled product sales in Branded Spirits offset growth in Ingredient Solutions.
Gross profit fell 18% to US$40.5 million, while gross margin narrowed by 350 basis points to 34.3%. Higher waste starch stream costs in Ingredient Solutions, increased Branded Spirits costs and lower brown goods volumes outweighed reduced distillation costs in Distilling Solutions.
Operating income declined 43% to US$12 million. Adjusted operating income fell 44% to US$14 million, while adjusted EBITDA decreased 33% to US$21.5 million.
President and Chief Executive Officer Julie Francis said the company’s cash flow and key measures exceeded expectations, supporting its decision to maintain its outlook.
“Our third quarter results show that we are doing what we said we would do. Our cash flow from operations was $32 million during the quarter, and adjusted EBITDA, adjusted basic EPS and ending net leverage each came in better than our expectations. As a result, we are reaffirming guidance,” Francis said.
Advertising and promotion expenses decreased 4% to US$6.4 million, reflecting the timing of spending and savings from consolidating outside agencies. Selling, general and administrative expenses increased 14%, primarily because of a higher incentive compensation accrual, partly offset by cost-saving initiatives. Adjusted SG&A rose 13% and represented 17% of consolidated sales.
Branded Spirits sales declined 4% to US$58.2 million from US$60.7 million. Gross profit decreased 9% to US$29.2 million from US$32.2 million. However, Penelope Bourbon sales increased 12%, while mid-priced brands grew 6%.
Distilling Solutions recorded a 29% sales decline to US$29 million from US$40.9 million. Gross profit fell 34% to US$9.4 million from US$14.2 million, as the business faced an oversupplied market.
Ingredient Solutions sales increased 5% to US$30.8 million, driven by higher sales of specialty wheat proteins, including textured proteins, and biofuel and other byproducts. Lower specialty wheat starch volumes partly offset the gains, following longer-than-expected downtime after a plant shutdown.
Francis said: “In Branded Spirits, Penelope Bourbon sales grew 12% and our mid-priced brands grew 6%. Distilling Solutions continued to navigate an oversupplied market and Ingredient Solutions grew sales by 5%.”
She added that as the company becomes Sempreon on November 2, its focus remains on executing its strategic roadmap across all three businesses, supported by financial discipline.
MGP Ingredients reaffirmed its fiscal 2026 guidance, projecting sales of US$480 million to US$500 million and adjusted EBITDA of US$90 million to US$98 million.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
