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Sep 30, 2023
Vita Coco Q3 2023 Earnings Report
Net sales increased and gross margin improved, driven by lower transportation costs and strong sales growth.
Key Takeaways
The Vita Coco Company reported strong Q3 2023 results, with net sales increasing by 11% to $138 million and gross margin improving to 41%. Net income rose to $15 million, or $0.26 per diluted share, driven by sales growth and margin expansion. The company raised its full-year net sales and adjusted EBITDA guidance and announced a $40 million share repurchase program.
Net sales grew by 11% to $138 million, driven by an 8% increase in Vita Coco Coconut Water sales and a 5% volume growth.
Gross profit reached $56 million, representing 41% of net sales, a significant increase from 26% in the prior-year period.
Net income was $15 million, or $0.26 per diluted share, compared to $7 million, or $0.13 per diluted share in the prior year.
Non-GAAP Adjusted EBITDA was $27 million, up from $12 million in the prior-year period, driven by gross profit improvements.
Forward Guidance
The company expects net sales growth of approximately 13-15% for the full year 2023. Full year gross margins are expected to be in the range of 35% to 37%. Adjusted EBITDA is forecast in the range of $64-67 million.
Positive Outlook
- Net sales growth of approximately 13-15% compared to fiscal year 2022
- Mid teens Vita Coco Coconut Water growth
- Strength in private label resulting from expanded distribution with new and existing customers
- Revised expectation of retaining the majority of a key customer's private label coconut water business
- Full year gross margins in the range of 35% to 37%
Challenges Ahead
- Expected private label price/mix impacts
- Increased investment in SG&A to support the long term growth of the company
- Unpredictability in the movement in foreign currency rates
- Future charges or reversals outside of the normal course of business
Historical Earnings Impact
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Avg. Return Before/After Earnings
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