The Vita Coco Company (COCO) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales rose 3.2% year-over-year to $144.1 million, driven by branded coconut water and international growth, with Vita Coco achieving the number one brand position in Germany and strong US retail scan growth of 14%.

• Net income increased to $19.1 million, up from $18 million in Q2 2023, with adjusted EBITDA up to $32.2 million and gross margin improving to 41%.

• Strong cash position with $150 million as of June 30, 2024, and no debt under revolving credit facility.

• Inventory delays and ocean freight volatility constrained shipments and are expected to impact gross margins in the second half of the year.

• Continued innovation with launches like Vita Coco Treats and expansion in multi-packs and organic offerings.

Financial highlights

• Q2 2024 net sales: $144.1 million (up 3.2% year-over-year); gross profit: $59 million (41% margin, up 400–420bps); net income: $19.1 million; adjusted EBITDA: $32.2 million (22.4% margin, up 34%).

• Year-to-date net sales: $255.8 million (up 2.6%); net income: $33.3 million; adjusted EBITDA: $53.5 million.

• SG&A costs decreased 5% to $29 million in Q2, mainly due to timing of marketing investments.

• Diluted EPS: $0.32 in Q2; $0.57 year-to-date.

Outlook and guidance

• Full-year 2024 guidance reaffirmed: net sales of $500–$510 million, gross margins of 37–39%, and adjusted EBITDA of $76–$82 million.

• Guidance assumes current container availability, transit times, and ocean freight rates persist; $15 million in higher transportation costs expected in H2 2024.

• SG&A expected to remain flat or slightly increase year-over-year; cash balance projected to remain healthy, supporting M&A and share buybacks.

• Management expects continued volatility from macroeconomic and geopolitical factors, including inflation and supply chain pressures.