What Happened?

Shares of beverage company Zevia (ZVIA) fell 13.8% in the afternoon session after the company reported underwhelming preliminary fourth-quarter results with expectations for wider losses driven by increased spending on its holiday campaign. Precisely, the company expects an Adjusted EBITDA loss of $3.9 million to $4.2 million, compared to previous expectations for losses of $1.8 million to $2.2 million. In addition, sales are expected to be within the previous guidance range, which is less than exciting and mostly in line with consensus estimates. However, Zevia wasn't the only one to report weak holiday demand, as Five Below and Abercrombie & Fitch also didn't see the success that the market expected. 

What The Market Is Telling Us

Zevia’s shares are extremely volatile and have had 94 moves greater than 5% over the last year. But moves this big are rare even for Zevia and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 8 months ago when the stock dropped 20.6% on the news that the company reported weak first-quarter results, with revenue falling below analysts' expectations. Management attributed the weak sales performance to a delay in the recovery of SKU level distribution at retailers as well as "fulfillment challenges we faced in 2023," leading to a 10% decline in volumes during the quarter. Looking ahead, Its revenue guidance for both the next quarter and the full year missed analysts' expectations. Overall, this was a mediocre quarter for Zevia PBC.

Zevia is down 16.8% since the beginning of the year, and at $3.82 per share, it is trading 17.7% below its 52-week high of $4.64 from January 2025. Investors who bought $1,000 worth of Zevia’s shares at the IPO in July 2021 would now be looking at an investment worth $279.85. 

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