LaCroix maker’s CEO blames ‘injustice’ for poor sales, compares job to caring for a handicapped person

Companies announce earnings in news releases typically titled “Company reports fourth-quarter earnings,” or “Company delivers record-breaking second quarter.” National Beverage Corp., the company that makes the LaCroix brand of sparkling water, has never quite followed that path, but Chief Executive Nick Caporella deviated from the typical earnings script in a much more extreme way Thursday.

The release was headlined “‘We Just Love Our LaCroix’ Consumers Chant,” and it only got weirder from there. Besides a boilerplate first sentence stating what results National Beverage FIZZ, +1.11% was announcing and the numbers, the entire release was a long, rather unhinged quote from Caporella.

“We are truly sorry for these results stated above,” the three-paragraph quote began. “Negligence nor mismanagement nor woeful acts of God were not the reasons — much of this was the result of injustice!”

Caporella’s rant did not specify exactly what injustice caused National Beverage to sell fewer cans of flavored sparkling water than was expected. Instead, he moved on an awkward metaphor, comparing his job of managing a company that sells drinks to caring for a disabled person.

“Managing a brand is not so different from caring for someone who becomes handicapped,” Caporella said. “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.”

Caporella’s company enjoyed a huge boost in its finances and profile when LaCroix became popular, with the stock beginning to show the effects in 2016. The largest gains came in 2017, when National Beverage was worth more than $5.5 billion at times.

LaCroix, and National Beverage stock, have come back to earth since, with a market capitalization of about $3.2 billion as of Thursday’s close — and that is bound to change Friday, as shares were down about 15% in after-hours trading Thursday. National Beverage sales fell by $6.5 million from last year to $221 million in the quarter reported Thursday, and profit fell to $24.8 million from $41.1 million. Shares have declined 31% in the past year.

Both Caporella and LaCroix have faced troublesome accusations of late as well. Caporella has been accused of inappropriate touching by two pilots, The Wall Street Journal reported in July, and a class-action lawsuit filed last year accuses LaCroix — which is billed as “naturally essenced” sparkling water — of false advertising for using artificial ingredients.

A National Beverage spokesman said that the injustice of which Caporella spoke was the class-action lawsuit, which accuses LaCroix of containing chemicals also found in cockroach insecticide. On the comparison of managing a brand and caring for a handicapped person, he said that Caporella meant that “it just requires a lot of tender, loving care.”

More from Barron’s: LaCroix Maker Is Paying Big Dividends While the Stock Slumps to a New Low

National Beverage earnings releases have long included little besides a quote from Caporella, who has rarely followed a typical executive script. This release, however, stood out even from previous examples.

“We are not a typical company,” the National Beverage spokesman said. “What comes out in the writings and the releases is the passion and intensity that we have for our consumer and for our products.”

The release ended with Caporella harkening back to the odd title, before his signature signoff of “‘Patriotism’ – If Only We Could Bottle It!”

“One can be induced to purchase by cheapening price or giving away a product, but falling in love with a feeling of joy is the result of contentment. Just ask any LaCroix consumer . . . Would you trade away that LaLa feeling? ‘No way, they shout – We just love our LaCroix!’ I am positive they respond this way each and every time.”

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