LaCroix share price down 16% after CEO's controversial comments
The sparkling water company's stock is down after the CEO calls poor sales 'injustice'.
LaCroix share price tumbled after the chief executive officer( CEO), Nick Caporella, made controversial comments about its disappointing third quarter (Q3) earnings report. The beverage company’s stock fell by as much as 16%.
What did Nick Caporella say to make LaCroix share price fall?
Caporella wrote an emotional letter after a lackluster Q3 earnings report. He said in a statement that the disappointing numbers were an ‘injustice’. However, he didn’t clarify how the poor earnings report was caused by any unfair treatment.
‘We are truly sorry for these results stated above. Negligence nor mismanagement nor woeful acts of God were not the reasons — much of this was the result of injustice,’ said Caporella.
Caporella also made comments that could be seen as insensitive to people with disabilities. He compared running LaCroix to caring for a person with disabilities.
‘Managing a brand is not so different from caring for someone who becomes handicapped. 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,’ wrote Caporella in a statement.
What’s next for LaCroix share price?
Caporella’s controversial statements are part of continuing trouble for the company. LaCroix’s owner, National Beverage, had to contend with a class action lawsuit brought by a customer. The lawsuit claims that the company lied about having all-natural ingredients in its flavored sparkling water.
Investment firm Guggenheim believes that competition from other beverages will only add to the corporation’s woes and possibly lower LaCroix’s share price.
‘We continue to see a challenging competitive environment for LaCroix, especially as [Coca-Cola owned] Topo Chico gains traction and Pepsi intends to invest heavily behind Bubly again this year. In our view, this is the bigger issue going forward that will likely prevent LaCroix from regaining its lost market share,' said Guggenheim.
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