COCO - Vita Coco rallies after earnings smasher
2023-08-02 07:55:30 ET
Vita Coco Company ( NASDAQ: COCO ) rallied in early trading on Wednesday after the company sailed past consensus estimates with its Q2 earnings report and hiked guidance.
Revenue was up 21.1% to $139.7M, driven by 23% net sales growth and 19% volume growth of Vita Coco Coconut Water. The increase in net sales during the quarter was driven by increased case equivalent volumes coupled with some benefits from net pricing actions on branded products offset by some lower price realization per CE for private label business.
Gross margin improved to 37% of sales in the quarter, representing a sequential improvement of over 500 basis points from the first quarter, and an increase of greater than 1100 basis points from a year ago. Margin rates improved for COCO due to a reduction of ocean freight rates versus last year and efficiencies in the supply chain network including lower domestic transportation rates, coupled with increased branded pricing and increased sales volumes, improved gross margins and gross profit significant.
Adjusted EBITDA for the second quarter was $24M vs. $7M a year ago. The increase in adjusted EBITDA was primarily driven by strong net sales growth and gross margin improvement resulting primarily from decreased transportation costs, partially offset by increased investments in SG&A.
On the balance sheet, COCO held a cash position pf $84M at the end of the quarter and had no debt on its revolving credit facility.
Looking ahead, Vita Coco ( COCO ) expects full-year revenue growth of +10% to +12% and for gross margins to improve relative to the second quarter for the rest of the year.
Shares of Vita Coco ( COCO ) jumped 6.65% in premarket action to $28.14. The beverage stock is up more than 90% on year-to-date basis.
More on Vita Coco:
- Vita Coco: Sales And Margin Momentum To Continue
- Recent options trades
- More articles from Seeking Alpha analysts
- Growth metrics on Vita Coco
- Seeking Alpha's Quant Rating for Vita Coco
For further details see:
Vita Coco rallies after earnings smasher