Overview

• U.S. craft beverage maker's Q1 revenue fell 29% yr/yr on lower volumes

• Gross profit and margin declined sharply due to product liquidation and inventory write-offs

• Company posted wider net loss as higher SG&A and weaker sales weighed on results

Outlook

• Company expects corrective actions to improve execution, margins, and topline momentum in 2026

Result Drivers

• LOWER SALES VOLUMES - Co said revenue decline was primarily driven by lower volumes with recurring national customers and higher promotional and other allowances

• INVENTORY RATIONALIZATION - Gross margin decline was mainly due to liquidation of slow-moving product and inventory write-offs related to product portfolio optimization

• HIGHER SG&A EXPENSES - SG&A rose due to investments in personnel, marketing and related services to support Asia growth initiative

Company press release: ID:nGNXc5QZGJ

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Sales	Miss	$7.10 mln	$7.52 mln (1 Analyst)
Q1 Net Income		-$6.50 mln
Q1 Gross Profit		$700,000

Analyst Coverage

• The one available analyst rating on the shares is "buy"

• Wall Street's median 12-month price target for Reed's Inc is $4.75, about 69% above its May 11 closing price of $2.81

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