Jones Soda Co.’s (JSDA Quick QuoteJSDA - Free Report) shares have lost 6.8% since the company reported earnings for the third quarter of 2024. This compares with the S&P 500 index’s 2% decline over the same time frame. Over the past month, the stock has gained 29.2% versus the S&P 500’s 31.2% growth.

Earnings & Revenue Performance

For the third quarter of 2024, Jones Soda reported revenues of $4.2 million, down 6.3% from $4.5 million in the prior-year quarter. The decline was attributed to reduced sales volumes caused by a Canadian distributor transition and the loss of a U.S. discount retail customer.

The company incurred a third-quarter 2024 loss per share of 2 cents, wider than the loss of 1 cent registered in the year-ago quarter.

Jones Soda Co. Price, Consensus and EPS Surprise

 

Jones Soda Co. price-consensus-eps-surprise-chart | Jones Soda Co. Quote

Key Performance Metrics

The gross margin contracted to 21.2% in the third quarter of 2024 from 32.9% in the prior-year quarter due to a one-time trade spend adjustment in Canada and an unfavorable product mix. Operating expenses increased 44.8% year over year to $3.5 million, reflecting higher marketing costs and legal expenses associated with the Mary Jones cannabis beverage business. Consequently, the net loss widened to $2.6 million from $0.9 million in the year-ago quarter.

Other Key Business Metrics

The company’s Mary Jones brand contributed $800,000 to revenues in the third quarter, a significant increase from $220,000 in the prior-year period. However, operating losses from the brand weighed on the overall profitability. Adjusted EBITDA, a non-GAAP measure, was negative $2.2 million compared with negative $0.9 million a year earlier, reflecting increased operating expenses and reduced gross profit.

Management Commentary

Paul Norman, chairman and interim CEO, acknowledged the disappointing results and outlined corrective measures, including adjustments to the Canada distribution model and the expansion of the HD9 cannabis beverage distribution network. The company has been focused on driving revenue growth through product innovation and improving operational efficiency. Notably, Jones Soda debuted several products, including a limited-edition s'mores soda and the functional prebiotic beverage line — Pop Jones.

Factors Influencing Results

The year-over-year revenue decline and gross margin contraction were led by operational challenges in Canada and the United States, coupled with increased promotional spending. Additionally, higher marketing expenses and legal costs associated with expanding the Mary Jones brand added pressure to the bottom line. Despite these challenges, management highlighted opportunities in the cannabis beverage market and the potential for its innovative products to contribute to growth.

Other Developments

In the third quarter of 2024, Jones Soda raised $3.7 million through a private placement, strengthening its cash position to $2.7 million as of Sept. 30, 2024. The proceeds are intended to support working capital and ongoing growth initiatives. The company also made leadership changes, appointing Paul Norman as the interim CFO following the resignation of Ronald Dissinger.

In addition, Jones Soda launched a range of products, including cannabis-infused beverages such as HD9 Cola and Zero Cola, which earned top honors in the 2024 Benzinga Hemp Beverage Competition. This product expansion aligns with the company's strategy to diversify its portfolio, and capitalize on trends in functional and cannabis-infused beverages.