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Jun 30, 2023
Vita Coco Q2 2023 Earnings Report
Net sales increased and gross margin improved.
Key Takeaways
The Vita Coco Company reported a strong second quarter with net sales increasing by 21% to $140 million and gross margin improving to 37%. Net income was $18 million, or $0.31 per diluted share. The company raised its full year net sales, gross margin and Adjusted EBITDA guidance.
Net sales grew by 21% to $140 million, driven by a 23% increase in Vita Coco Coconut Water sales.
Gross profit reached $51 million, representing 37% of net sales, a significant improvement from the previous year.
Net income was $18 million, or $0.31 per diluted share, compared to $1 million, or $0.02 per diluted share in the prior year.
Adjusted EBITDA was $24 million, a $17 million increase due to gross profit improvements, offset by increased SG&A spending.
Forward Guidance
The Company is updating its previously communicated full year 2023 guidance:
Positive Outlook
- Expect net sales growth of approximately 10-12% compared to fiscal year 2022, based on mid teens Vita Coco Coconut Water growth
- Expect gross margins for the remainder of 2023 to improve relative to the second quarter.
- Full year gross margins in the range of 35% to 37% reflecting improved transportation costs and branded pricing, and lower private label mix.
- Forecast Adjusted EBITDA in the range of $56-60 million reflecting full year net sales growth and gross margin improvement
- Management to provide additional details regarding the impact of the expected transition of a major private label customer during the earnings conference call later today.
Challenges Ahead
- weakness in private label due to the expected transition of a major private label customer starting in the fourth quarter.
- GAAP Net Income 2023 outlook is not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors, including the unpredictability in the movement in foreign currency rates, as well as future charges or reversals outside of the normal course of business.
Historical Earnings Impact
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