FIZZ Gets Flattened

Readers respond to the last two days at The Rundown, Bias (Parts 1 and 2):

“Agree with all points made! The president is killing the economy. Free market is the only thing that will save us, not protectionism or crony capitalism.”

Another reader concurs on one point…

“I agree the Fed is slowing the economy. Raising rates and lowering the Fed balance sheet are their chosen tools to slow an overheating economy. It is just too bad the economy isn’t, and wasn’t, overheating when they did this.”
This contributor says Trump’s a scapegoat:

“Blame the government for what it does: spends without responsibility.

“That is where your anger should be targeted…. President Trump is an easy scapegoat to hide the economy-killers in D.C. — Congressional entitlement spending. I cringe whenever I see any Congressperson mention, ‘Free for (pick your voter group)’.”

And this Civics lesson…

“What your ‘Dear Reader’ omitted is the president doesn’t spend money — Congress spends money. All spending bills must originate in the House of Representatives according to the Constitution.

“The President might propose a budget but Congress modifies, rejects, adds or subtracts from that budget and any other spending requests. The president signs or vetos the final bill but he isn’t responsible for generating it.”

Our reader must have gotten an A in Civics class; he’s right.

Your Rundown for Friday, March 8, 2019:

FIZZ Fizzles

In an earnings report for the record books, National Beverage Corp (FIZZ) — parent company of hipster darling LaCroix — reported some concerning misses for the three-month period ending Jan. 26, 2019.

First, the earnings news:

  • Sales declined $6.5 million over the same period last year
  • Market cap dropped to $3.2 billion versus $5 billion last year
  • EPS of $0.53 versus $0.88 reported last year

Now for the unique earnings report: CEO Nick Caporella titled the report “‘We Just Love Our LaCroix’ Consumers Chant”. (With the numbers above, do they really, Nick?)

Next, Mr. Caporella both apologizes for LaCroix’s poor performance and calls it an “injustice”.

The injustice he perceives is the corporate debacle in October when consumers questioned if LaCroix is as “all-natural” as it claims to be.

If only Caporella had stopped there; instead, he writes this incomprehensible metaphor:

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

Just why?

In any case, FIZZ shares are down 22.5% this morning and several rating companies are downgrading the stock to sell.

For investors, LaCroix’s not the only game in town: Pepsi is pushing its brand of carbonated water Bubly and Coke’s backing Topo Chico.

Personally? We think seltzer’s for mixing.

Market Rundown for Fri. March 8, 2019

S&P 500 futures are are down 20 points to 2,728.49.

Oil slid $1.74 off its price to $54.92 per barrel.

Gold’s up — whoa — $12.30 to $1,298.40.

Bitcoin is up $32.72 to $3,915.23.

Have a good weekend. We’ll catch up Monday.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown and has been with Agora Financial / Seven Figure Publishing since 2005. He's been covering technology and markets for over a decade.

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