MGP Ingredients, Inc. (NASDAQ: MGPI), a leading producer of premium branded spirits and food ingredient solutions, reported its third quarter 2024 results on October 31, 2024. The company posted strong revenue and earnings growth despite facing some headwinds in its Distilling Solutions segment due to softening American whiskey category trends and elevated industry-wide barrel inventories.

For the third quarter of 2024, MGP Ingredients reported net sales of $161.5 million, down 24% from the prior year period. However, this decline was primarily driven by the closure of the company's Atchison distillery in December 2023. Excluding the impact of this closure, consolidated sales decreased by a more modest 14% year-over-year.

The company's Branded Spirits segment continued to perform well, with sales of $62.6 million, down only 6% compared to the same quarter last year. This resilience was attributed to the company's focus on its premium plus portfolio, which saw sales grow by 1% year-over-year. MGP Ingredients' strategy of investing in its brands and the American whiskey and tequila categories appears to be paying off, despite the broader industry challenges.

MGP Ingredients' gross profit for the quarter was $65.8 million, representing a gross margin of 40.8%, a 610 basis point improvement over the prior year period. This margin expansion was largely driven by the strong performance of the Branded Spirits segment, which saw gross margins increase to 51.8%, up 830 basis points year-over-year.

Looking ahead, MGP Ingredients plans to further lower its net aging whiskey put away, scale down its whiskey production, and optimize its cost structure in 2025 to mitigate the impact of lower production volumes. However, the company remains confident in the long-term growth prospects of its Distilling Solutions business, as its whiskey inventories remain well-positioned to capitalize on the expanding American whiskey category.