Suja Cuts Full-Year Outlook as Grocery Traffic and Discounting Bite

Suja Life (NASDAQ:SUJA) lowered its full-year outlook to $351 million to $354 million in net sales and $68 million to $70 million in adjusted EBITDA, after weaker grocery traffic and heavier discounting undercut its plan for a stronger fourth quarter. The revision came in the same quarter the company beat its own sales forecast. Both statements are true, and the gap between them frames the story.

What did the third quarter actually deliver?

Net sales reached $76.4 million, up 3.3% year over year and ahead of the roughly $71 million estimate management shared in August. The number deserves scrutiny: it included approximately $2 million in shipments pulled forward from the fourth quarter. Strip that out, and the beat narrows.

Adjusted EBITDA rose to $10.5 million from about $1 million a year earlier. The improvement came primarily from lower marketing expense as Suja lapped the prior-year launch of Slice. Net loss narrowed to $8.3 million from $14.6 million. Gross margin, however, fell to 43.9% from 46.3%, below the approximately 47.8% estimate given in August.

Chief Executive Officer Maria Stipp said grocery pressure that began in July had intensified, with softer store traffic and promotions producing lower returns. "Distribution only creates value when it turns," Stipp said, noting that new placements and some core single-serve grocery products were selling less on average than a year earlier. The company gained category share and grew in other channels, but it no longer expects the fourth-quarter improvement it had planned.

The takeaway: revenue grew, but the growth was partly borrowed from Q4 and margin eroded faster than management forecast.

Why is the fourth-quarter outlook lower?

The full-year guidance implies fourth-quarter sales of $83.7 million to $86.7 million and adjusted EBITDA of $17.8 million to $19.8 million. The outlook assumes current grocery conditions persist through year-end.

Chief Financial Officer Jeff Pedersen said the fourth-quarter outlook includes elevated trade investment, recorded as a reduction in net sales. Suja is shifting spending from upper-funnel marketing into trade programs. Pedersen said the shift reduces reported sales and gross margin but is largely neutral to adjusted EBITDA. That is a presentation choice as much as an operational one, and CFOs should note where the costs land in the income statement.

Pedersen attributed the gross margin decline to increased promotional investment, lower production volumes that reduced fixed-cost absorption, and higher inbound freight and packaging costs tied to oil prices. He said gross margin should improve sequentially in the fourth quarter as seasonal production volumes rise. The promise rests on volume; the caveat is that promotional intensity has already exceeded plan once.

Marketing spending fell to $8 million, or 10.5% of sales, from $17.1 million, or 23.2%, a year earlier — a decline that reflects the absence of one-time Slice launch investment rather than a new efficiency baseline.

What did 2027 guidance signal?

Stipp said she expects 2027 to be a growth year, but with a slower start followed by improving growth as new distribution, retail programs and innovation reach shelves. Pedersen listed the obstacles plainly: difficult first-half comparisons, continued grocery pressure, elevated promotions, and the loss of a significant customer program the company does not expect to repeat. Formal 2027 guidance arrives on the fourth-quarter call in March.

A growth forecast without numbers is a statement of intent, not a forecast.

Which channels and brands grew?

Suja's share of the natural healthy beverage category rose approximately 30 basis points to just over 9%, according to Nielsen, and Stipp said Suja was the only one of the category's five largest manufacturers to gain share in the period.

• Nielsen-measured sales grew nearly 20% in club
• More than 40% in convenience, from a small base; convenience is 3% of the business and a 2027 distribution focus
• About 6% in mass
• Food channel sales declined 1.7%

Suja Organic Refreshers grew more than 40% and Boosted Juice more than 18% on Nielsen-measured sales. Wellness shot multipacks grew while single-serve shots softened; Stipp said increased promotions to match competitors' pricing largely protected share for Vive and Suja shots. Slice net sales rose 3% to $2.7 million in the quarter, with year-to-date sales up 31%. Stipp said better-for-you soda growth moderated and new distribution built more slowly than expected; she confirmed Suja is not pulling back from Slice but is focusing on flavors and retail opportunities that suit the brand.

What did the refinancing change?

Suja completed a refinancing in August that included a $165 million term loan maturing in 2031. Pedersen said the effective interest rate fell to 5.7% from 9.7% at the end of the prior year, without adding leverage. At quarter-end, the company held $15.5 million in cash and $163 million in total debt, with $100 million in undrawn capacity under its revolving credit and delayed-draw facilities.

The balance sheet is cheaper and unchanged in size — the one unambiguous improvement in the quarter.