The Vita o pany(US:COCO)2025-10-29 12:56Financial Performance - Net sales for Q3 2025 reached $182.3 million, a 37.3% increase from $132.9 million in Q3 2024[117] - Gross profit for Q3 2025 was $68.7 million, compared to $51.6 million in Q3 2024, reflecting a gross margin improvement[117] - Net income for Q3 2025 was $24.0 million, up from $19.3 million in Q3 2024, representing a 24.5% year-over-year growth[117] - Total net sales increased by $49.4 million, or 37.2%, to $182.3 million for the three months ended September 30, 2025, driven primarily by a 41.8% increase in Vita Coco Coconut Water net sales[119] - Vita Coco Coconut Water net sales increased by $38.4 million, or 40.9%, to $132.4 million for the three months ended September 30, 2025, supported by a 30.3% increase in case equivalents (CE) volume[123] - International segment net sales rose by $9.9 million, or 48.1%, to $30.6 million for the three months ended September 30, 2025, with CE volume growth of 44.1%[126] - For the nine months ended September 30, 2025, consolidated net sales increased by $93.3 million, or 24.0%, to $481.993 million, with Vita Coco Coconut Water contributing a 31.1% net sales increase[119] - The Company reported an income from operations of $27.9 million for the three months ended September 30, 2025, compared to $20.6 million in the same period of 2024[117] Operating Expenses - Operating expenses increased to $40.7 million in Q3 2025 from $31.0 million in Q3 2024, driven by higher marketing and administrative costs[117] - Operating expenses for the three months ended September 30, 2025, increased by $9.8 million, or 31.6%, to $40.7 million, reflecting higher selling, general, and administrative costs[133] - SG&A expenses increased by $9.8 million, or 31.6%, for the three months ended September 30, 2025, primarily due to a $4.3 million rise in people-related expenses[134] - For the nine months ended September 30, 2025, SG&A expenses rose by $17.7 million, or 20.2%, driven by an $8.9 million increase in people-related expenses and a $5.8 million increase in marketing expenses[134] Tariffs and Supply Chain - The U.S. government implemented a 10% baseline tariff effective April 2025, with additional country-specific rates, creating uncertainty in the supply chain[105] - The company is monitoring the evolving tariff landscape and pursuing pricing adjustments and sourcing strategy modifications to mitigate impacts[105] - The company sources products from approximately 20 factories across seven countries, maintaining a fixed asset-lite supply chain model[102] Product Performance - The Private Label product category experienced a decline in net sales by 12.9% for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to the loss of service regions[119] - Other product net sales increased by $3.2 million, or 182.5%, to $4.9 million for the three months ended September 30, 2025, primarily due to the rollout of Vita Coco Treats[125] - Vita Coco Coconut Water net sales increased by $7.1 million, or 47.4%, to $21.9 million for the three months ended September 30, 2025, primarily due to strong demand in Europe[127] Cash Flow and Financing - Cash flows from operating activities increased by $15.1 million, or 41.9%, for the nine months ended September 30, 2025, compared to the same period in 2024[154] - Cash and cash equivalents as of September 30, 2025, were $203.7 million, up from $164.7 million as of December 31, 2024[147] - Cash used in investing activities was $4.9 million for the nine months ended September 30, 2025, primarily due to leasehold improvements for new offices[155] - Net cash used by financing activities decreased by $2.4 million, or 23.5%, for the nine months ended September 30, 2025, driven by lower share repurchases[156] - The company anticipates that current cash, cash equivalents, and future cash flows will be sufficient to meet cash needs for at least 12 months[148] - The company may seek additional equity or debt financing in the future to invest in complementary businesses and product development[151] Tax and Derivative Instruments - The effective tax rate for the nine months ended September 30, 2025, was 20.9%, down from 23.9% in the same period of 2024[142] - Income tax expense for the three months ended September 30, 2025, was $6.7 million, with an effective tax rate of 21.8%[141] - Unrealized gains on derivative instruments for the nine months ended September 30, 2025, were $6.3 million, compared to losses of $5.9 million for the same period in 2024[136] Debt and Credit Facilities - The outstanding balance on the Revolving Credit Facility was zero as of September 30, 2025, indicating no reliance on this credit line[160] - The company had an immaterial amount of debt outstanding related to vehicle loans as of September 30, 2025[157] - The 2020 Credit Facility was amended to extend its maturity to February 13, 2030, with committed borrowings of $60 million[158]