The Vita Coco Company posted 3% net sales growth to $144 million in its Q2 2024 earnings report this morning, bolstered by improvements to its core coconut water line.
- Year-to-date net sales were up 3% to $256 million.
- Coconut water products grew 4% in Q2 and remain up 3% year-to-date.
- Gross profit was $59 million in Q2, up by $8 million, and was $106 million year-to-date, up $21 million year-over-year.
- Selling, general and administrative expenses were $29 million, down from $30 million in 2023, “largely due to the timing of marketing investments,” the company said.
- The company reaffirmed its full year guidance projecting 2024 sales of around $500-$510 million.
“The organization’s ability to drive brand growth through strong retail execution and creative marketing programs, while continuing to improve profitability and cash generation at the same time, is something that every member of the team should be proud of,” said co-founder and executive chairman Michael Kirban in a statement.
Speaking on a call with investors and analysts this morning, Kirban noted that the company is benefitting not only from strong sales growth in the U.S. – in the 13 weeks ending June 30, Vita Coco brand coconut water was up 13.9% in MULO and c-store – but also from private label sales which, although down slightly, he said has allowed the business to “benefit more fully from our category growth initiatives.”
Goals for the year, Kirban said, remain “unchanged” with an emphasis on increasing household penetration, expanding use occasions through innovations like its indulgent Vita Coco Treats line and accelerating its international business, particularly in the U.K. and Germany.
Sales of the brand’s Vita Coco Coconut Juice, launched in 2022, grew 27% in convenience stores, Kirban added, while the business has seen Mass retailers “encouraged” by the Treats line, which debuted in April at Target stores with a Strawberries and Cream flavor.
On the call, CEO Martin Roper said the company has secured production capacity for 2025 to “more than cover” for accelerated category growth of coconut water.
Analysts were optimistic on the earnings. Investment bank Jefferies suggested that revenues were “strong” while EBITDA “beat on pricing/mix and lower finished good/transport costs.” Although higher shipping costs are liable to hurt gross margins later this year, the firm said the freight issues are “not as bad as expected” and that “underlying momentum is good, which should dampen the impact.”