The following is a summary of the Reed's, Inc. (REED) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Reed's Q1 2024 net sales dropped to $9.6 million due primarily to limited raw material purchases.

• Gross profit for Q1 2024 increased by 26% to $3.4 million, compared to $2.7 million in Q1 2023.

• The company experienced a significant rise in gross margin to 35.6% because of a decrease in supply chain and input costs.

• Selling, general, and administrative costs declined by 19% to $2.6 million.

• Operating expenses reduced to $4.1 million, a decrease from $5.3 million in the same period of the previous year.

Business Progress:

• Reed's made advances through cost-cutting initiatives, improving gross margin and reducing operating expenses by 23%.

• Reed's expects further reductions in short shipments. The company witnessed growth across key product categories, with Reed's extra ginger beer and Ginger ale registering 8% and 9% year-over-year growth respectively.

• The company benefited from operational efficiencies courtesy of their new co-packing partner, Battle Co-Packing, and reduced delivery and handling costs by 29%.

• New product launches are scheduled at Sprouts and the initiation of a partnership with Costco is underway.

• Plans for expansion into the on-premise channel to increase brand awareness are in progress.

• Reed's is focused on online sales, with sustained growth witnessed in e-commerce and plans to add more online sales channels over the summer.

• The company expects continued margin growth and double-digit sales growth.

• They are set on introducing 'hard ginger' products at Trader Joe's and have planned promotional activities to boost sales from the mid of the second quarter onwards.

More details: Reed's Inc IR

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