The following is a summary of the Zevia PBC (ZVIA) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Zevia reported a Q3 net sales of $36.4 million, a 16% decline year-over-year, attributed to reduced store selling and the strategic decision to exit the Kids and Mixers categories.

• Adjusted EBITDA improved significantly to a loss of $1.5 million from a loss of $9.1 million in the same quarter last year, due to enhanced efficiencies and cost savings.

• Gross margin improved substantially to 49%, up from the previous year, driven by productivity initiatives and better cost management.

Business Progress:

• Zevia has expanded its distribution into 4,300 Walmart stores, aiming to increase its presence and leverage significant consumer traction for its brand.

• The company has initiated a robust brand marketing strategy and is focused on product innovation, with successful introductions like Creamy Root Beer and Vanilla Cola.

• Zevia is advancing in its Direct Store Delivery (DSD) initiative, enhancing its reach and service in the Pacific Northwest.

• Moving forward, the company plans broad-reaching marketing campaigns and social media initiatives to build brand awareness and drive consumer engagement.

Opportunities:

• Zevia's ongoing expansion into Walmart stores and operational efficacies are key drivers expected to bolster the company's market presence.

• With a reinforced marketing strategy and product innovation, Zevia is tapping into the growing movement of consumers favoring healthier, zero sugar, and clean label sodas.

Risks:

• The cited risks include potential shortfalls in expected revenue from new promotional tests and distribution changes, particularly in the club and mass customer channels, which might impact top and bottom lines.

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