Eastside Distilling, Inc. (EAST) Misses Q1 EPS by 8c, Revenues Beat

Eastside Distilling, Inc. (NASDAQ: EAST) reported Q1 EPS of ($0.36), $0.08 worse than the analyst estimate of ($0.28). Revenue for the quarter came in at $3.75 million versus the consensus estimate of $3.59 million.

COVID-19 Impact to Q1 2020As previously reported on March 30, 2020, the first quarter of 2020 started strong. However, starting in mid-February through the end of March, there was a slowdown in sell-through as a result of COVID-19. Additionally, the off-premise retailers delayed the commencement of the planned Burnside Whiskeys and Hue-Hue Coffee Rum national launch as a result of COVID-19.

The Company enacted a series of initiatives to improve sell-through, including offering promotional discounts on Redneck Riviera Whiskey and Azuñia Tequila, as well as a focus towards online sales. Further, with the shutdown of on-premise accounts throughout much of the country, Eastside began ramping up support efforts for local off-premise independent stores and wholesalers by creating several programs aimed to energize the local marketplace. Likewise, as the shutdowns diminish, Eastside plans to expand upon these programs to support its off-premise accounts.

The Company's Craft Canning operations is experiencing strong demand from the craft beer and wine industry as brewers and wineries have batches that they have made and need to get them into cans. Additionally, brewers have shifted to canned beer instead of kegs as the on-premise market is not likely to return to normal operations soon. All of these factors have pushed demand towards the Company's mobile canning business.

Management Commentary"I am pleased with our depletions, as we saw a 54% improvement for Redneck Riviera Whiskey through April, compared to the same period a year ago," said Lawrence Firestone, CEO. "I believe our rapid pivot during this unique period of time towards activations and rate of sale will be rewarded in the months and quarters to come as distributors and retailers recalibrate their inventory levels which will better align shipments and depletions."

"We continue to focus on ways to become more efficient across our entire organization," Mr. Firestone continued. "We have decreased our inventory levels by $1.3 million since the end of the year, shut down our retail operations, and progressed with our outsourcing initiatives. These changes, coupled with a return to a more normal operating environment in the off-premise business allows us to continue to drive our growth initiatives."

For earnings history and earnings-related data on Eastside Distilling, Inc. (EAST) click here.

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