The Vita Coco Company (COCO) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales declined 4% year-over-year to $132.9–$133 million, mainly due to a 36.8–37% drop in private label sales, partially offset by 7.8–8% growth in branded coconut water.

• Net income rose 27% to $19.3 million (EPS $0.32), aided by improved pricing, FX gains, and lower SG&A expenses.

• Adjusted EBITDA for Q3 was $22.9–$23 million (17–17.3% margin), down from $26.9–$27 million in Q3 2023.

• Inventory shortages and supply chain disruptions, including ocean container constraints and port labor strikes, impacted both branded and private label sales, but recovery began late in the quarter.

• Strong international performance, especially in the U.K. and Germany, with innovation and new product launches supporting growth.

Financial highlights

• Q3 2024 gross profit was $51.6–$52 million (38.8–39% margin), down $5 million and 190–200 bps year-over-year due to higher transportation costs.

• Year-to-date net sales were $388.7–$389 million (flat), with gross margin improving to 40.5–41% from 36%.

• SG&A expenses decreased 5% in Q3 and 2% YTD, mainly due to timing of marketing investments.

• Cash and cash equivalents stood at $156.7–$157 million as of September 30, 2024, with no debt.

• Share repurchases YTD: 504,246–534,246 shares for $12.0–$12.8 million at an average price of $23.97.

Outlook and guidance

• Full-year 2024 net sales expected between $505–$515 million, gross margin 37–39%, and Adjusted EBITDA $80–$84 million.

• Q4 expected to see strong top-line acceleration as inventory replenishes, but higher ocean freight costs will pressure margins.

• SG&A expected flat to slightly down for the year; marketing spend to increase only as inventory normalizes.

• Added production capacity for 2025–2026 to support growth and supply chain flexibility.

• Current liquidity and credit facilities are sufficient for at least the next 12 months.