Reed's (REED) Misses Q4 EPS by 1c, Revenues Miss

Reed's (NASDAQ: REED) reported Q4 EPS of ($0.09), $0.01 worse than the analyst estimate of ($0.08). Revenue for the quarter came in at $7.2 million versus the consensus estimate of $8.32 million.

“We had a very productive fourth quarter, accomplishing a significant amount in a short period of time. We have strengthened our supply chain, upgrading and expanding our copacker organization and adding capacity to the equivalent of three times our current volume. We now have redundancies in each of our package types, and are now operating with uninterrupted fulfillment while driving higher quality standards. We have also worked diligently to reduce costs, both in our supply chain and SG&A, which should begin to be reflected in our margins during fiscal 2020. We feel very good about where we stand heading into the upcoming year,” stated Norman E. Snyder, Chief Executive Officer of Reed’s, Inc. “During the fourth quarter, we continued to drive growth of our core brands, led by continued strong volume growth of Virgil’s while Reed’s volume improved to roughly flat with the prior year period. The availability of Reed’s Zero Sugar in both bottles and cans positions us to return to growth in our largest brand. Our innovation continues, while more targeted and manageable. Reed’s Wellness Ginger Shots launched during the fourth quarter and we are focused on driving online sales and retail distribution. Reed’s Craft Ginger Mules are now in test in specific retailers and we are excited to begin production of Reed’s Real Ginger Ale, which began today. I am very pleased with our positioning, improved supply chain operations and how our organization has adopted a culture of execution over the past several months. We have the brands, and are now well equipped to deliver upon our opportunity. We will continue to drive constant improvement while focused on driving volume and margin enhancement in fiscal 2020 and beyond.”

Full Year 2020 Guidance

• During fiscal 2020, the Company expects to generate core brand growth in the range of 10%+. The Company anticipates a gross margin of 32% or greater for the full year 2020.

For earnings history and earnings-related data on Reed's (REED) click here.

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