Reeds Q3 net sales fall on lower volumes from national customers
REED•Reeds' third-quarter net sales fell 7% year over year to $6.51 million, below the $8.30 million estimate, as volumes from national customers declined. Gross profit rose 34% to $1.64 million, and gross margin increased to 25% from 17%.
1. Sales and margins
Reeds said third-quarter net sales fell 7% year over year to $6.51 million, primarily because of lower volumes with recurring national customers. Gross profit rose 34% to $1.64 million, while gross margin improved to 25% from 17%, reflecting lower promotional and other allowances and reduced cost of goods per case.
2. Costs and financing
Selling, general and administrative expenses fell as the company optimized costs, partly offset by investment in its Asia growth initiative. After the quarter, Reeds refinanced a $9.25 million loan and closed a $10 million private placement. The company expects sequential operating improvements in coming quarters and aims to expand gross margins, maintain cost discipline, strengthen sales execution and expand retail coverage.
