National Beverage Corp. (FIZZ) - Q1 2026 Summary
Business Context and Reporting Period
This Form 10-Q covers the three fiscal months ended August 2, 2025 (First Quarter of Fiscal 2026). National Beverage Corp. operates as a single segment developing, producing, and marketing sparkling waters, juices, energy drinks, and carbonated soft drinks, primarily in the United States. Key brands include LaCroix, Shasta, Faygo, and Rip It.
Key Financial Metrics
| Metric | Q1 2026 (Aug 2, 2025) | Q1 2025 (Jul 27, 2024) |
|---|---|---|
| Net Sales | $330.5 million | $329.5 million |
| Gross Profit | $125.5 million | $122.4 million |
| Gross Margin | 38.0% | 37.2% |
| Operating Income | $70.8 million | $69.5 million |
| Net Income | $55.8 million | $56.8 million |
| Diluted EPS | $0.60 | $0.61 |
| Operating Cash Flow | $59.1 million | $57.5 million |
| Cash & Equivalents | $249.8 million | $77.0 million (End of Q1 2025) |
| Debt Outstanding | $0 | $0 |
Material Changes vs. Prior Period
- Sales Mix: Net sales increased 0.3% driven by a 4.4% increase in average selling price per case, partially offset by a 3.9% decline in case volume across both carbonated soft drinks and Power+ Brands.
- Profitability: Gross margin expanded to 38.0% from 37.2% due to pricing power, despite a 2.9% increase in cost of sales per case driven by packaging and ingredient costs.
- Expenses: Selling, general, and administrative (SG&A) expenses rose to $54.7 million (16.5% of sales) from $52.9 million (16.1% of sales), primarily due to increased marketing spend.
- Interest Income: Other income decreased to $2.2 million from $4.3 million due to lower average invested cash balances.
- Liquidity: Cash and cash equivalents increased by $56.0 million to $249.8 million. This contrasts with the prior year quarter, which saw a $250.0 million decrease due to a special cash dividend of $304.1 million paid in July 2024.
Outlook, Risks, and Commentary
- Capital Expenditures: Management anticipates fiscal 2026 capital expenditures will not exceed fiscal 2025 levels. Current quarter CapEx was $3.1 million.
- Liquidity Position: The company maintains $150 million in unsecured credit facilities with no borrowings outstanding. Management believes existing resources are sufficient for the next 12 months.
- Market Risks: Results are subject to fluctuations in raw material costs (mitigated by aluminum swap contracts), supply chain disruptions, weather conditions, and consumer preference shifts.
- Accounting Updates: The company is evaluating the impact of new FASB standards regarding income tax disclosures and expense disaggregation, with no material impact expected from recent credit loss measurement updates.
Investor Verification Checklist
- Volume vs. Price: Verify the sustainability of the 4.4% price increase given the 3.9% volume decline; assess if pricing power can be maintained without further volume erosion.
- Input Costs: Monitor aluminum and packaging costs, as these drove the 2.9% increase in cost of sales per case.
- Marketing Efficiency: Review the return on the increased marketing spend ($13.6M vs $11.5M prior year) to ensure it drives future volume recovery.
- Dividend Policy: Confirm if the special dividend paid in the prior year was a one-time event or indicative of future capital return strategies.
- Working Capital: Note the increase in inventory ($8.8M) and the decrease in inventory turns (8.7x to 8.2x); verify if this is strategic stocking or a sign of slowing demand.