ATCHISON, KAS. — MGP Ingredients, Inc. on Jan. 17 announced its financial results for the year ended Dec. 31, 2019, would fall well shy of earlier guidance. The earnings warning was issued more than a month before the company is expected to release financial results for 2019.

“The shortfall versus our previously communicated guidance is the result of us ultimately being unsuccessful in transacting a large portion of the aged whiskey sales we had forecast for the fourth quarter,” said Augustus C. Griffin, president and chief executive officer of MGPI.

Anticipated earnings per share for the year were cut to $2.20 to $2.30 a share, down from late October guidance of $2.55 to $2.75, but still up modestly from $2.17 in 2018.

Sales had been projected to rise mid-single digits in 2019, but are now estimated at $362 million, versus $375 million the year before. Gross margins had been expected to widen modestly from 24.4% in 2018 and now are forecast at 21%.

The share price of MGPI tumbled after the company’s announcement. In Nasdaq trading Jan. 17, MGPI shares fell as low as $36.14, down 32% from $52.78 per share a day earlier. It was the second worst day for MGPI’s stock in the last 30 years (shares fell 34% in November 2008).

In October, Mr. Griffin emphasized the importance of the aged whiskey market for MGPI’s growth and said the company was devoting considerable resources to building its position in the sector.

“We are doing an outstanding job recruiting new customers for our new distillate and aged whiskey offerings, and we have added a second sales manager to support our international efforts,” he said. “We also signed a new multi-year distillate supply agreement with one of our largest existing customers.”

He went on to estimate the company’s investment in aged whiskey inventory as $95.2 million, at cost.

“We remain confident in the long-term value of this inventory and its ability to meet the needs of our ever growing and diverse mix of customers,” he said. “We continued to expand our warehouse capacity during the quarter.”

With fourth-quarter sales failing to materialize as anticipated, Mr. Griffin on Jan. 17 said MGPI was stepping back to more fully analyze market conditions.

“While this shortfall is disappointing, particularly given the line of sight we believed we had to these aged sales, we do not believe it reflects weakness in the overall American whiskey category, our overall position in that market or the potential long-term value of our aged whiskey inventory,” he said. “We are currently conducting additional analysis to better understand the aged whiskey market, and, going forward, we will continue to refine our strategies and tactics to improve the sales predictability and management of this important piece of our business.

“While it will be a number of weeks before we complete and report our final results, we wanted to provide this information now. Our final results may differ somewhat from these preliminary estimates.”

In the wake of the announcement analysts downgraded their recommendations of MGPI. SunTrust Robinson Humphrey cut the company to a hold from a buy and lowered its price target to $55 from $80. Craig-Hallum Capital Group L.L.C. also cut its recommendation to a hold from a buy, lowering its price target to $40.