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 and private label coconut water, with Vita Coco maintaining leading positions in the U.S., U.K., and Germany.

• Net income increased to $19.1 million, up from $18 million in Q2 2023, with gross margin expanding to 41% due to lower transportation costs and improved pricing.

• Adjusted EBITDA for Q2 2024 was $32.2 million (22.4% of net sales), up from $24 million (17.2%) in Q2 2023.

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

• Supply chain constraints, especially ocean freight container shortages and extended transit times, limited shipment growth and inventory levels.

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 (13% margin).

• Adjusted EBITDA: $32.2 million (22.4% margin, up 34% YoY); diluted EPS: $0.32.

• Year-to-date net sales: $255.8 million (up 2.6–3%); net income: $33.3 million; diluted EPS: $0.57.

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

• Operating cash flow for the first six months: $26.7 million, flat year-over-year.

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.

• Expect $15 million in higher transportation costs in H2 2024 versus H1, impacting gross margins in Q3 and Q4.

• SG&A expected to remain flat or slightly increase year-over-year; cash balance projected to remain healthy.

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