Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| Instead, we have a solid gross margin that allows to invest in DSD, and then, ultimately, as well in marketing to accelerate both expansion and growth |
| I’m grateful for the remarkable effort put forth from veteran and new Zevia team members in 2023 and I’m proud of their well-executed initiatives not only to restore service levels, but also to ensure supply chain scalability for the future |
| His track record of success in driving growth and profitability will make him an excellent partner for me and for our leadership team and our board as we chart the course to the future |
| We realized healthy growth margins of 44.9% versus 42.9% in 2022 indicating strength in our business model which allows us to invest in future growth |
| We are excited to continue to accelerate topline growth for the full year 2024 through a mix of volume and price |
| Zevia’s strong consumer value proposition and leading brand position are incredibly well positioned to take advantage of the accelerating tailwinds in the natural soda category |
| I’m pleased to announce that Zevia returned to volume growth and net sales growth in the fourth quarter as the remediation of customer fulfillment issues in the midst of a supply chain transformation was implemented on time and as the brand refresh came to life on shelf |
| We launch marketing out of store this spring and summer, and we are evolving our route-to-market with an advantage in taste across the usage occasion with proven broad distribution and in relative affordability |
| Zevia’s business has growing tailwinds as consumers across demographics continue to move away from sugar and increasingly toward clean label products |
| We saw positive impacts from a price increase mid-year which deliver a sizable impact of $1.5 million, as well as an increase in volumes of 3.7% or $0.9 million reflecting a return to volume growth after previous quarters were impacted by short-term supply chain fulfillment challenges |
| Consumer spending on the brand is up per household and per trip, and over the past 18 months we have increased price with strong consumer acceptance |
| This demonstrates brand strength and supports unit economics and a strong gross margin which enable our ability to invest in growth going forward |
| Our brand refresh improves on-shelf visibility and continues to position Zevia as the beacon for this growing category within CSD |
| Zevia is the natural soda brand with a strong foundation at scale at center store across natural and conventional grocery with a loyal consumer base and now we have the opportunity to expand our base through a launch into immediate consumption and cold single distribution in new and existing channels |
| Zevia’s focus remains taking our better-for-you beverages mainstream, our competitive advantages include great taste, limitless enjoyment across usage occasions, our zero sugar clean label and our affordability relative to other better-for-you beverages |
| Having strong enough pricing to turn around and go DSD and be able to sustain our path to profitability and make sure that that model benefits us, the DSD operator and the retailer |
| And remember that we have a really healthy strong center store business as a multi-back and home stocking brand and this is now our upside, to drive trial and significantly step change the size of our consumer base |
| Now, for Zevia, we also have upside in other channels, and the most important example of that is convenience, and convenience is best serviced by a DSD model with frequency of visits and merchandising capabilities on a regular basis in a fast turn environment |
| Our growth for the quarter was led by continued exciting progress at the world’s largest retailer who doubled Zevia’s space in 2023, as mentioned last quarter and is testing the brand in the mainstream carbonated soft drink aisle |
| The test continues to outperform expectations |
| We’ve had strong consumer acceptance of that |
| We have strong growth margins indicative of our ability to invest and we’re excited to have Girish in seat as our new CFO |
| And as that idea is seeded with the consumer and they come to the shelf, they find when properly merchandised, Zevia sitting next to other fast-growing competitors and Zevia is advantaged on taste, advantaged on relevance across usage occasions, we call it, limitless enjoyment versus being limited to minimal consumption based on a functional promise |
| So, combine this with strong velocity, and for the first time, marketing out of store now that we have the brand refreshed fully in market, in-stocks back on shelf, a stable supply chain and those are some of the accelerators of velocity, and therefore, net sales that we expect going forward |
| Our newest flavors, Creamy Root Beer and Vanilla Cola, continue as number one and number two in Zevia dollar growth across the quarter, and both have ample room to expand distribution further as we expect their performance to support increased brand presence in upcoming spring resets at retail |
| With fast-growing innovation like Creamy Root Beer and Vanilla Cola, we have a good story going into resets to ensure that we gain back not only the space we had dedicated prior but that we make some strategic gains in presence on shelf as well |
| We continue to have strong demand and now we have new scalability in our supply chain pricing upside and a step change organizational capability amid a rising tide of excitement around natural soda and a seismic consumer shift away from sugar |
| Our top e-commerce customer posted 30% growth in December, indicative of supply chain recovery and continued demand in one of our strongest channels |
| And so we come into the year bullish on full year growth with strong gross margins, which indicate our ability to invest, be it marketing or route-to-market, and a new CFO at the helm |
| Zevia turns the corner into 2024 with a sharp brand refresh in market, a stable and scalable supply chain, momentum in critical new market segments and strong pricing |
| Statement |
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| In short, our Q1 was softer in shipments than we expected |
| We are experiencing a delay in the recovery of on-shelf stock levels at retail, a lag effect of last year’s customer fulfillment issues amid supply chain transition, and thus some initial volume softness |
| Gross margin was 40.7% down 3.6 percentage points versus the same quarter a year ago |
| I recognize you’re going to provide it on Q1 and then also sort of the Q1 guidance being a bit softer than expected |
| Net loss was $9.2 million, compared to a net loss of $6.2 million last year, a decline of $3 million or 48.3% primarily driven by the supply chain logistic challenges and inventory losses |
| The company expects net sales for the first quarter of 2024 to be in the range of $38 million to $40 million, reflecting a delay in the recovery of on-shelf stock level and display activity at retail at the start of the year |
| Adjusted EBITDA loss was $6.8 million, compared to an adjusted EBITDA loss of $2.9 million same time prior year, due to continued expenses from short-term supply chain recovery efforts through the back half of the year as expected |
| We’re having some technical difficulties |
| Apologies for the delay in communication given our technical difficulties |
| Given a supply chain logistic challenges which are now remediated freight to customers and freight transfer costs were temporarily elevated as expected but translated into a lower impact compared to the previous quarter |
| Can you help us understand how the competitive landscape is right now for Zevia? I mean, there were some losses on the volume and shelf side last year |
| So that progression has been a little slower than expected in Q1 |
| And adjusted EBITDA loss was $19 million for the year, compared to an adjusted EBITDA losses of $19.6 million for the full year of 2022 |
| So we saw the softness coming kind of mid-quarter this first quarter here after a first round of scan data in late January and with January shipments, and we can share that that is already improving |
| The decrease was driven by the decision to accelerate our supply chain transition which included the write-off of some legacy branded material, discontinuation of long-tail SKUs as we focus on our highest potential products and the write-off of some raw materials as we transition our supply chain to a new model |
| And then maybe just as a follow-up, maybe sticking with gross margins, we’re under a bit of pressure here in Q4, as you mentioned |
| Our increased inventory level also impacted our warehouses cost as we continue to manage our inventory back to optimal level |
| Spring resets are obviously a moment in time, varying between February, March and April, depending on the retailer, and we know that some of the degradation of our presence on shelf is really just in-store merchandising rather than true dedication of space to Zevia |
| We’ve invested in incremental merchandising to top accounts to speed recovery there, and the spring reset should really be a trigger going forward |
| Net losses were $28.3 million, as compared to net losses of $47.6 million in 2022 |
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