The following is a summary of the Zevia PBC (ZVIA) Q4 2023 Earnings Call Transcript:
Financial Performance:
Zevia reported Q4 net sales of $37.8 million, up 6.9% compared to prior year, boosted by a price increase and a return to volume growth.
Gross margin dropped 3.6 percentage points to 40.7%, impacted by supply chain transition and write-off of some legacy branded material.
Selling, marketing, and G&A expenses rose, with significant surge in selling and marketing costs to $13.8 million, largely due to increased freight and warehouse expenses.
The company experienced a net loss and loss per share increase to $9.2 million and $0.14 per share respectively, primarily due to supply chain issues.
Zevia's balance sheet remains strong, with $32 million in cash and cash equivalents, and no outstanding debt.
Business Progress:
Zevia saw a return to volume growth and net sales growth in Q4, supported by a successful customer fulfillment issue resolution and brand refresh.
The brand is well-positioned to deliver a gross margin in the mid-40s, backed by strong consumer acceptance of its pricing.
Growing consumer preference for clean label products provides business expansion opportunities, as seen in the launch into immediate consumption and cold single distributions.
Zevia is striving to take its better-for-you beverages mainstream through initiatives like launching a regional direct store delivery (DSD), gaining distribution in some regional convenience chains in the U.S. and Canada, and ramping up marketing efforts.
The company is focusing on high potential products and transitioning its supply chain to a new model, expected to improve its position regarding selling costs in 2024.
Zevia expects Q1 2024 net sales to lie between $38 million and $40 million, choosing not to provide full year guidance until Q1 earnings call.
More details: Zevia IR
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