Zevia PBC Q1 FY2026 earnings call

• Marketing: Delivered two brand campaigns, partnership with Cardi B, highest organic social media reach and engagement in March. - Product innovation: On-trend fruit flavors rolling out nationally, outperforming median velocities, new packaging driving trial. - Distribution: Gains in grocery, club, mass, and e-commerce channels, including Costco rotation, Walmart expansion, and e-commerce growth.

Net sales grew 21.2% to 46.1 million in the first quarter. Gross margin was 48.4%, a 170 basis point decline from the prior year due to higher aluminum costs and mix of club sales. Selling and marketing expenses were 14.5 million or 31.5% of net sales, with selling expense 9.4 million or 20.4% and marketing expense 5.2 million or 11.2%. General and administrative expenses were 9.1 million or 19.7% of net sales. Adjusted EBITDA was approximately 0.9 million compared to a loss of 3.3 million prior year. Product segments saw on-trend fruit flavors outperforming median velocities at top retailers, new packaging supporting space gains, and distribution gains in grocery, club, mass, and e-commerce channels.

Raised full year net sales guidance to between 170 to 175 million (7% growth midpoint). Full-year adjusted EBITDA outlook negative 2 million to negative 4 million. Second quarter net sales expected 43 to 45 million, adjusted EBITDA loss negative 0.5 million to negative 1 million, with 1 million restructuring costs for distribution center relocation.

Macro uncertainty, higher fuel prices, aluminum costs, impact on profitability. Uncertainty in cost pressures subsiding over time and proactive steps to offset costs.

Q: Talk about Cardi B relationship and marketing approach.

A: Partnership with Cardi B has always on social media approach, summer advertising campaign.

Q: Pricing approach?

A: Passed price increase in Q1, unlikely to pass incremental in back half.

Q: Rollout of new packaging and flavors?

A: In second inning, nearly all new packaging by end of Q2.

Q: Growth in Q3?

A: Shifting promo and marketing dollars, fully rolled packaging by Q2 leads to acceleration.

Q: Club rotation?

A: Early to quantify impact, strengthens velocities, opens conversation for future rotations.

Q: Q1 outperformance?

A: Strong base business, retail sales stronger than expected, price increase more fully realized, cost discipline.

Q: Cost offsets?

A: Already seeing fuel expense impact, potential 3-5 million cost saves in Q4 or next year.