MGP Ingredients Inc. (NASDAQ: MGPI), a leading producer of branded and distilled spirits as well as food ingredients, saw its stock price plummet 5.59% on October 31, 2024, after the company reported its third-quarter 2024 results and provided a lackluster outlook for its whiskey business.

In its earnings report, MGP Ingredients reported third-quarter revenue of $161.5 million, in line with Wall Street expectations. However, the company lowered its full-year revenue guidance to $700 million at the midpoint, down 6.5% from its previous estimate, citing softening demand for American whiskey and elevated industry-wide barrel inventories.

The Distilling Solutions segment, which includes the company's whiskey operations, saw sales decline by 36% year-over-year in the third quarter to $71.9 million. MGP Ingredients revealed plans to lower its net aging whiskey put away, scale down whiskey production, and optimize its cost structure to mitigate the impact of lower production volumes in 2025.

While the company's Branded Spirits segment, which includes premium and value-priced spirits, saw a 12% increase in gross profit, the overall outlook for the whiskey business weighed heavily on investor sentiment. MGP Ingredients CEO David Bratcher acknowledged the current market dynamics would likely have an even greater impact on the Distilling Solutions segment's sales and profitability in 2025, despite the company's confidence in the long-term potential of the American whiskey category.