Zevia’s 2026 Earnings Call: Executives Clash on Nationwide Singles Rollout Timing and Price Increase Plans

Date of Call: Aug 5, 2026

Financials Results

• Revenue: $45M, up 1.1% YOY
• Gross Margin: 48.9%, up 20 basis points YOY

Guidance:

• Q3 2026 net sales expected between $44M and $46M, reflecting 10% growth at the midpoint.
• Q3 adjusted EBITDA loss expected between negative $3M and negative $3.5M.
• Full year 2026 net sales guidance maintained at $170M to $175M, reflecting 7% growth at the midpoint.
• Full year 2026 adjusted EBITDA range maintained at negative $2M to negative $4M.
• Expect additional cost savings of $3M to $5M beginning in Q1 2027.

Business Commentary:

Revenue Performance and Strategic Positioning:

• Xevia reported net sales of $45 million for Q2 2026, at the high end of guidance, with a year-to-date increase of 10.4% to $91.1 million.
• Growth was driven by successful pricing actions and the discontinuation of the tea offering, despite lapping prior-year distribution load-ins.

EBITDA Improvement and Cost Management:

• The company achieved an adjusted EBITDA of $0.5 million above expectations in Q2 2026.
• This improvement was supported by strong price realization and ongoing cost discipline, despite increases in aluminum costs.

Marketing and Brand Awareness Initiatives:

• Xevia's marketing campaign, "Refreshingly Real" featuring Cardi B, generated 29.5 billion social video views and 1.8 billion PR earned media impressions.
• The campaign aimed to enhance brand awareness and engagement, supporting new product rollouts and brand relevance.

Operational Efficiency and Future Outlook:

• Selling and marketing expenses as a percentage of net sales improved to 29% in Q2 2026 from 30% in Q2 2025, due to cost savings in warehousing and repackaging.
• The company plans to achieve an additional $3 to $5 million in cost savings beginning in Q1 2027, focusing on operational efficiency and strategic reinvestment.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed being 'encouraged by our progress year-to-date and the momentum going into the third quarter' and that 'we have a distinct market position, which presents a tremendous opportunity.' The new CEO stated 'my belief in Xevia's potential is greater than ever' and that 'we have an exciting future in front of us.'

Q&A:

• Question from Andrew Strelzik (BMO Capital Markets): How do you think about the cadence of the priorities flowing through to performance?
  Response: The highest priority is activating the singles platform, which is seen as the most urgent and meaningful opportunity to drive growth.

• Question from Andrew Strelzik (BMO Capital Markets): Regarding Q2 performance above guidance and holding annual guidance, is there anything incrementally different for Q4?
  Response: Q4 growth is consistent with earlier expectations, reflecting timing shifts in marketing spend and innovation launches, and the club business becoming more consistent.

• Question from Jim Solera (Stevens Inc.): Why now for singles and what operational infrastructure supports execution?
  Response: Now is the time due to improved product taste, size, and price/value equation. Execution will be supported by a new go-to-market plan being developed, aiming to start in early 2027.

• Question from Jim Solera (Stevens Inc.): How do aluminum and transport cost increases flow through to gross margin?
  Response: Aluminum and fuel costs are headwinds, but the company has taken price increases and will see some margin recovery in Q4. Additional cost savings are planned for 2027.

• Question from Eric DeLaurier (Craig-Hallam): Any early insights on the national rollout of new packaging and flavors?
  Response: Too early to evaluate, but initial readings in natural channels show higher velocity. The company is excited and will assess further over the next month.

• Question from Eric DeLaurier (Craig-Hallam): Are you seeing increased web traffic or engagement from the Cardi B campaign?
  Response: The campaign generated massive early engagement, including nearly 30 billion social video views and 1.8 billion earned media impressions. The strategy is a full-funnel approach leading to a new product launch in January.

• Question from Eric Serrata (Morgan Stanley): Will the initiatives require meaningful new investment?
  Response: It is still early, but the company plans to make dollars work harder, focusing on efficient go-to-market mixes, brand communication, distribution expansion, and marketing awareness.

• Question from Eric Serrata (Morgan Stanley): Is the slowdown in functional soda a headwind or opportunity?
  Response: It is an opportunity to sharpen Zevia's brand relevance, though the overall category remains steady.

Contradiction Point 1

Timing for Nationwide Singles Platform Rollout

Inconsistent timeline for when the singles product will be available nationwide.

Andrew Strelzik (BMO Capital Markets) - Andrew Strelzik (BMO Capital Markets)

2026Q2: The company is prioritizing this. Regarding guidance, Q4 growth is consistent with earlier expectations... There is no specific headwind called out for Q4. - [Girish Satya](CFO)

"Considering the outlined priorities' impact timelines and Q2's strong performance, is there a specific headwind expected in Q4?" - Jim Salera (Stephens Inc.)

2026Q2: Execution is aimed to start in early 2027. - [Alexandre Ruberti](CEO)

Contradiction Point 2

Potential for a 2026 Price Increase

Contradiction on whether another price increase is planned for 2026.

What were Stevens Inc.'s key financial results in the earnings call? - Jim Solera (Stevens Inc.)

2026Q2: A recent price increase was preemptive for aluminum costs, but given macroeconomic volatility and consumer flight to value, another price increase is unlikely in 2026. - [Girish Satya](CFO)

How do recent transport/freight cost increases (e.g., diesel) impact gross margin, and is there potential for incremental pricing due to these cost increases? - Eric Serotta (Morgan Stanley)

2026Q2: It is still very early to precisely define the investment levels for the strategic plan. - [Alexandre Ruberti](CEO)

Contradiction Point 3

Early Evaluation of New Packaging/Flavor Rollout Performance

Inconsistency in the stage of rollout and ability to evaluate performance.

Eric DeLaurier (Craig-Hallum) - Eric DeLaurier (Craig-Hallum)

2026Q2: The rollout of new packaging and flavors is very early (only about 90% complete), but initial readings in natural channels show higher velocities. - [Alessandro Ruberti](CEO)

Could you provide early insights into the national rollout of new packaging and flavors and any velocity pickups? - Eric Des Lauriers (Craig-Hallum)

2026Q2: The national rollout is approximately 90% complete, with full rollout expected in the coming month. It is too early for a comprehensive evaluation... - [Alexandre Ruberti](CEO)

Contradiction Point 4

Timing and Impact of New Packaging Rollout

Contradictory statements on the rollout status and expected velocity impact of new packaging.

Eric DeLaurier (Craig-Hallum) - Eric DeLaurier (Craig-Hallum)

2026Q2: The rollout of new packaging and flavors is very early (only about 90% complete), but initial readings in natural channels show higher velocities. - [Alessandro Ruberti](CEO)

What early insights can you share regarding the national rollout of new packaging and flavors, and have you observed any increases in sales velocity? - Eric Des Lauriers (Craig-Hallum Capital Group)

2026Q1: The rollout is in the 'second inning' as of May. By the end of Q2, shelves should be stocked with almost all new packaging. Accelerating velocities are expected to continue into the back half of the year. - [Amy Taylor](CFO)

Contradiction Point 5

Gross Margin Trajectory for Q2 and Beyond

Contradiction on whether Q2 marks a recovery or the low point for gross margins.

Jim Solera (Stevens Inc.) - Jim Solera (Stevens Inc.)

2026Q2: Increased aluminum and fuel costs have been headwinds... A recent price increase was preemptive... The company will continue to find efficiencies. - [Girish Satya](CFO)

How do recent increases in transport and freight costs affect gross margin, and is there potential for incremental pricing? - Andrew Strelzik (BMO Capital Markets)

20260226-2025 Q4: Gross margin will downtick in Q1 due to the national Costco program. Starting in Q2, the impact of the price increase and tariff mitigation factors will bring margins back to the upper 40s range and remain there for the rest of the year. - [Girish Satya](CFO)