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MarketWatch First Take

LaCroix maker’s CEO compares job to caring for a handicapped person, blames ‘injustice’ for poor sales

National Beverage Corp. stock drops nearly 15% after results, which were delivered in release that was even stranger than usual

Companies announce earnings in news releases typically titled “Company reports fourth-quarter earnings,” or “Company delivers record-breaking second quarter.” National Beverage Corp. has never quite followed that path, but Chief Executive Nick Caporella deviated from the script in a much more extreme way Thursday.

The company that makes the LaCroix brand of sparkling water headlined a Thursday earnings release, “‘We Just Love Our LaCroix’ Consumers Chant,” and it only got weirder from there. Besides a boilerplate first sentence stating what results National Beverage FIZZ+0.45% was announcing and the numbers, the entire release was a long, rather unhinged quote from Caporella.

“We are truly sorry for these results stated above,” the three-paragraph quote began. “Negligence nor mismanagement nor woeful acts of God were not the reasons — much of this was the result of injustice!”

Caporella’s rant did not specify exactly what injustice caused National Beverage to sell fewer cans of flavored sparkling water than was expected. Instead, he moved on to an awkward metaphor, comparing his job of managing a company that sells packaged drinks to caring for a disabled person.

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

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Nathan Yates, a professor of economics and finance who has spinal muscular atrophy, a form of muscular dystrophy, reached out to MarketWatch on Twitter after reading this story to share his anger about the characterization.

“We in the handicap community definitely don’t agree with the CEO’s stereotype of disability,” Yates wrote. “We’re not vegetables who can’t do anything for ourselves. Our handicaps rarely make us entirely useless as was indicated by the company’s press release.”

Both Caporella and LaCroix have faced troublesome accusations of late. Caporella has been accused of inappropriate touching by two pilots, The Wall Street Journal reported in July, and a class-action lawsuit filed last year accuses LaCroix — which is billed as “naturally essenced” sparkling water — of false advertising for using artificial ingredients.

A National Beverage spokesman said that the injustice of which Caporella spoke was the class-action lawsuit, which accuses LaCroix of containing chemicals also found in cockroach insecticide. On the comparison of managing a brand and caring for a handicapped person, he said that Caporella meant that “it just requires a lot of tender, loving care.”

Caporella’s company enjoyed a huge boost in its finances and profile when LaCroix became popular, with the stock beginning to show the effects in 2016. The largest gains came in 2017, when National Beverage was worth more than $5.5 billion at times.

LaCroix, and National Beverage stock have declined since, and shares took a big hit Friday after the report, falling 14.7%. The stock has now declined 41% in the past year and closed with a market capitalization of $2.8 billion Friday. National Beverage sales declined by $6.5 million from last year to $221 million in the quarter reported Thursday, and profit fell to $24.8 million from $41.1 million.

National Beverage earnings releases have long included little besides a quote from Caporella, who has rarely followed a typical executive script. This release, however, stood out even from previous examples.

“We are not a typical company,” the National Beverage spokesman told MarketWatch. “What comes out in the writings and the releases is the passion and intensity that we have for our consumer and for our products.”

The release ended with Caporella harking back to the odd title, before his signature signoff of “‘Patriotism’ – If Only We Could Bottle It!”

“One can be induced to purchase by cheapening price or giving away a product, but falling in love with a feeling of joy is the result of contentment. Just ask any LaCroix consumer . . . Would you trade away that LaLa feeling? ‘No way, they shout – We just love our LaCroix!’ I am positive they respond this way each and every time.”

This article has been updated with additional commentary and stock movement.

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