MGP Reaffirms 2026 Guidance After Third-Quarter Sales Drop

The Tip Desk · October 28, 2026 · 4 min read

Third-quarter sales were $117.9 million as the company reaffirmed full-year sales of $480 million to $500 million and adjusted EBITDA of $90 million to $98 million.

MGP Ingredients, Inc. (MGPI), a provider of branded and distilled spirits and food ingredient solutions, reported third-quarter sales of $117.9 million, down 10% from a year earlier, and reaffirmed its full-year 2026 outlook.

The year-over-year sales decline was slower than the 15% drop in the second quarter. The company said the decrease was primarily due to expected lower brown goods sales in Distilling Solutions and lower sales of international private-label bottled products in Branded Spirits’ other category, partially offset by higher Ingredient Solutions sales.

Gross profit fell 18% to $40.5 million and gross margin declined about 350 basis points to 34.3%. The company attributed the margin compression to higher waste starch stream costs in Ingredient Solutions, higher costs in Branded Spirits and lower brown goods volume, which more than offset lower distillation costs in Distilling Solutions.

Adjusted EBITDA decreased 33% to $21.5 million, a steeper year-over-year decline than the 23% drop in the second quarter. Net income was $6.9 million, or $0.32 a share. Adjusted net income was $8.6 million, or $0.39 a share. Operating income decreased 43% to $12.0 million; on an adjusted basis it decreased 44% to $14.0 million.

President and CEO Julie Francis said cash flow from operations was $32 million during the quarter and that adjusted EBITDA, adjusted basic EPS and ending net leverage each came in better than the company’s expectations. The company reduced total debt by $28.4 million in the quarter. The net debt leverage ratio was approximately 3.6x at September 30, 2026, compared with 3.5x at June 30.

Branded Spirits sales were $58.2 million, down 4% from $60.7 million, after a 1% decline in the second quarter. Gross margin in the segment fell 280 basis points to 50.2%. Excluding the other products category, which consists primarily of international private-label bottled products, sales were in line with the prior year and were negatively impacted by distributor system cutovers, the company said. Premium plus sales decreased 1%. Penelope Bourbon sales increased 12%. Mid-priced offerings grew 6%, led by Ezra Brooks 90 Proof, Exotico tequila and Juarez tequila. The other category fell 46% to $3.1 million.

Distilling Solutions sales of $29.0 million decreased 29% versus $40.9 million. Elevated industry-wide barrel inventories resulted in a 47% decline in brown goods sales, the company said. Sales of white goods and other co-products increased 32%, primarily due to higher sales volumes, and warehouse services revenue increased 3%. Gross margin in the segment fell 230 basis points to 32.4%. Higher white goods production volumes and cost savings initiatives led to lower distillation costs, partially offsetting the impact of lower brown goods sales.

Ingredient Solutions sales of $30.8 million increased 5% versus $29.3 million. Growth was driven by higher sales of specialty wheat proteins, including textured proteins, and biofuel and other byproducts, partially offset by lower specialty wheat starch sales volumes primarily due to longer-than-expected downtime following a scheduled plant shutdown. Specialty wheat proteins rose 15% and biofuel and other byproducts rose 1,842%. Specialty wheat starches fell 12%. Gross margin compressed 430 basis points to 6.0% on higher waste starch stream costs, partially offset by an initial insurance recovery payment related to a 2025 equipment outage.

Advertising and promotion expenses decreased 4% to $6.4 million, reflecting the timing of spend throughout the year as well as savings from outside agency consolidation. Selling, general and administrative expense increased 14%, primarily due to a higher incentive compensation accrual, partially offset by cost savings initiatives. Adjusted SG&A increased 13% and represented 17% of consolidated sales.

MGP reaffirmed consolidated guidance for fiscal 2026: sales of $480 million to $500 million, adjusted EBITDA of $90 million to $98 million, and adjusted basic EPS of $1.50 to $1.80, with weighted average basic shares outstanding of approximately 21.4 million and an effective tax rate of approximately 23%. Full-year capital expenditures are expected to be approximately $20 million. The board declared a dividend of $0.12 a share, payable November 27, 2026, to stockholders of record as of November 13.

The company said it will change its name to Sempreon, Inc. and its Nasdaq ticker symbol to CASK on November 2, 2026. Francis said the company’s focus remains on executing its strategic roadmap in each of its three businesses, supported by financial discipline.