The following is a summary of the Zevia PBC (ZVIA) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Zevia reported Q2 2024 net sales of $40.4 million, just above the top-end of their guidance, with a year-over-year decrease of 4.3%.

• The company experienced a net loss of $7 million, an increase from a $5 million net loss last year.

• Gross margin for Q2 was reported at 41.9%, down from the previous year, impacted partly by a $1.8 million charge related to excess inventory.

• The company anticipates gross margins to return to the mid-40s in Q3 with sequential improvements expected in the following quarters.

Business Progress:

• Launched new flavors including Creamy Root Beer, Vanilla Cola, and Cran-Raspberry, aiming to drive distribution, volume, and household penetration.

• Expanded distribution through regional direct-store delivery (DSD) partners to improve in-store presence and operational efficiency.

• Implemented productivity initiatives projected to save $12 million annually, enhancing operational efficiency and funding marketing and promotional activities.

• Increased marketing spending in Q2 to boost brand awareness and consumer engagement.

Opportunities:

• Zevia is focused on expanding household reach and product distribution across North America, especially with new upcoming retail partnerships and innovations in flavor and packaging.

• Increased promotion and strategic marketing investments to drive growth amidst a competitive beverage market.

• Leveraging a new direct-store distribution model in the Pacific Northwest to improve market presence and sales in the convenience channel.

Risks:

• Encountered SKU distribution setbacks and club distribution issues impacting short-term revenue and visibility.

• Reported a loss in net sales influenced by distribution challenges, including rotational losses in clubs and portfolio rationalization focusing on top-performing categories.

More details: Zevia IR

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