Zevia PBC (ZVIA, Financial), a company disrupting the liquid refreshment beverage industry with zero sugar beverages made with simple, plant-based ingredients, announced its third quarter 2023 results on November 7, 2023. Despite a decrease in net sales and unit volume, the company saw an increase in its gross profit margin.
Financial Performance Overview
For the third quarter of 2023, Zevia PBC (ZVIA, Financial) reported a decrease in net sales by 2.6% to $43.1 million compared to $44.2 million in the third quarter of 2022. The decrease in sales was attributed to a decrease in volumes due to short-term supply chain logistics challenges. However, the gross profit margin was 45.4%, up 2.1 percentage points year over year, primarily driven by pricing increases and favorable cost of goods sold.
Operating Expenses and Net Loss
Selling and marketing expenses increased to $20.5 million, or 47.5% of net sales, in the third quarter of 2023 compared to $12.9 million, or 29.2%, of net sales in the same quarter of the previous year. The increase was primarily due to increases in freight and freight transfer costs related to short-term supply chain logistics challenges. The net loss for the third quarter of 2023 was $11.3 million, compared to a net loss of $9.2 million in the third quarter of 2022.
Balance Sheet and Cash Flows
As of September 30, 2023, Zevia PBC (ZVIA, Financial) had $38.5 million in cash and cash equivalents and no outstanding debt, as well as an unused credit line of $20 million. This compares to $47.4 million in cash and cash equivalents, no outstanding debt, and an unused credit line of $20 million as of December 31, 2022.
2023 Guidance
The company is narrowing its net sales guidance for the full year of 2023 and reaffirming the high-end of the range, expecting to be between $165 million and $168 million, with fourth quarter projections in the range of $36 million to $39 million.
Company's Commentary
The Zevia brand remains healthy with strong demand reflected in continued double-digit velocity growth," said Amy Taylor, President and Chief Executive Officer. "Our sustained improvement in gross margin is indicative of the health of the business, and promising innovation performance plus distribution expansion initiatives support our expectations to return to double-digit growth for the future."
Explore the complete 8-K earnings release (here) from Zevia PBC for further details.
