Why National Beverage Stock Gained 13% in June

What happened

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National Beverage (NASDAQ: FIZZ) shareholders beat the market last month by gaining 13%, according to data provided by S&P Global Market Intelligence, compared to a flat result for the S&P 500.

The soda and sparkling water specialist is now running at about even with the broader stock market over the last 12 months but well ahead of the S&P 500 over the past three-year and five-year time periods.

So what

June's rally came after the company closed the books on a strong fiscal 2018. Sales jumped 18% overall, mainly thanks to surging volume for its core La Croix sparkling water brand. The established cola giants, meanwhile, have been plugging along at closer to 2% volume growth.

The high demand allowed National Beverage to increase average selling prices, too, which helped gross profit margin increase to 40% of sales from 39%.


Now what

National Beverage faces intense competition from well capitalized rivals who are aiming to slow its market share growth in the attractive sparkling water niche. Yet that has been true for the past three years, and the company has still managed to improve annual revenue by 51% while expanding operating margin to 21% of sales from 12%. It will need to continue introducing popular carbonated beverage products, while pushing its sales footprint into more markets, to extend those financial wins into fiscal 2019.

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Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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