What happened

Shares of National Beverage (NASDAQ:FIZZ), the soda company behind the hit La Croix sparkling water franchise, outpaced the market last month by gaining 17% compared to an 8% spike in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally only put shareholders a small step closer to positive territory, though, since the stock remains down about 22% over the past year compared to a 1% decline in the S&P 500.

A woman drinking sparkling soda from a glass.

Image source: Getty Images.

So what

National Beverage paid out a large special dividend late in the month and shares likely climbed in anticipation of that cash return. But the bigger driver behind January's rally were shifting investor expectations around the company's brand image, which has been under attack in recent months. Executives revealed in early December that sales growth slowed to below 10% in the fiscal third quarter following negative press about potential unnatural ingredients in its sparkling water products.

The company said in late January that recent laboratory tests supported National Beverage's ingredient claims that are central to its image as a natural, healthier alternative to many popular soda drinks.

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Now what

Investors will have to wait until the company releases its fourth-quarter report, likely in mid-March, to see if sales growth really did return to a more robust pace as CEO Nick Caporella and his team predicted. We'll also learn in that report whether National Beverage had to spend significantly more on marketing and advertising to try to repair the damage its brand has taken.