MGP Revises Downwards Sales Forecast But Q3 Profits Up

03 Nov 2016 --- Profits at MGP Ingredients increased in Q3 but sales nudged down as it revised downwards its sales forecast for the year.

The Kansas-based distiller and food ingredients supplier has reported profits up from $6.7m to $9.5m in the quarter but net sales fell marginally from $80.3 to $79.9m. However sales were ahead of analysts’ estimates.

MGP Ingredients has restated its guidance for full-year sales, saying net sales are now expected to decline in low-single digits.

It had previously estimated sales would grow in the mid-single digits, which in itself was downgraded from a higher estimate.

The downgrade comes as MGP Ingredients battles a “challenging” and “volatile” fuel ethanol market.

Across its Ingredients Solutions division, sales were down 2.8 percent to $13.2m.

Chief Executive Gus Griffin said: “Our Ingredient Solutions segment showed solid improvement. We expect pricing headwinds to continue as we work to strengthen our position against long-term macro consumer trends.”

Across its Distillery Products division, net sales were flat at $67m.

Griffin said: “In our Distillery Products segment, our focus is on migrating away from industrial alcohol by growing our vodka and gin business, and expanding our whiskey business.”

“While the industrial alcohol business continues to show softness, we are pleased with the pace of this migration.  Demand for our premium bourbon and rye whiskeys continues to outpace category trends.”