MGP Ingredients (MGPI) Q3 2026 earnings summary

Executive summary

• Q3 sales were $117.9M, down 10% YoY; adjusted EBITDA of $21.5M and adjusted basic EPS of $0.39 declined YoY but beat expectations, and FY2026 guidance was reaffirmed.

• Cost discipline, strategic-roadmap execution and $31.9M of Q3 operating cash flow supported results; debt declined $28.4M in the quarter.

• Penelope sales grew 12% and Ingredient Solutions sales rose 5%, partly offsetting weakness in Distilling Solutions amid industry oversupply.

Financial highlights

• Gross profit was $40.5M, down 18% YoY; gross margin fell 350 bps to 34.3%, pressured by higher Ingredient Solutions waste-starch costs, Branded Spirits costs and lower brown-goods volumes.

• GAAP net income was $6.9M versus $15.4M; adjusted net income was $8.6M. GAAP EPS was $0.32 versus $0.71; adjusted EPS was $0.39 versus $0.85.

• Adjusted EBITDA was $21.5M, down 33% YoY; adjusted operating income was $14.0M, down 44%. Advertising and promotion expense fell 4% to $6.4M.

• YTD net loss was $115.9M, including $180.8M in impairment and other charges; adjusted net income was $27.7M and adjusted EPS was $1.29.

• YTD sales declined 12% to $348.7M and gross profit fell 20% to $120.5M; SG&A was down 1% to $62.8M.

Outlook and guidance

• FY2026 guidance remains sales of $480M-$500M, adjusted EBITDA of $90M-$98M and adjusted basic EPS of $1.50-$1.80 on ~21.4M weighted-average basic shares.

• FY operating cash flow is expected at $50M-$55M and free cash flow at $30M-$35M, excluding the Penelope earnout payment; Q4 is expected to be stronger than Q3.

• Segment outlook: Branded Spirits sales down mid-single digits, Premium Plus up low-single digits; Distilling Solutions sales down ~35% and gross profit down ~40%; Ingredient Solutions sales of $140M-$150M with high-single to low-double-digit gross margins.

• FY net whiskey put-away estimate is $13M-$18M; capital expenditures are expected at ~$20M, primarily for facility improvement, sustenance and EHS projects.

• Expected effective tax rate is ~23%; interest expense is expected at ~$12M, with Q4 sequentially higher than Q3.