Core Insights - Vita Coco reported Q2 2025 results with GAAP revenue of $168.8 million and diluted earnings per share of $0.38, exceeding analyst estimates [1][2] - The company experienced strong sales growth driven by branded coconut water, but faced significant pressure on gross margins and profitability due to rising costs [1][7] Financial Performance - Net sales (GAAP) increased by 17% year-over-year, with the Americas segment contributing $141.961 million, up from $124.502 million [5] - Non-GAAP adjusted EBITDA decreased to $29.2 million from $32.2 million in the prior-year quarter, reflecting a 9.3% decline [2][7] - Gross margin (GAAP) narrowed to 36.3% from 40.8% the previous year, impacted by higher costs including ocean freight and a new 10% import tariff [7] Market Position and Strategy - Vita Coco holds over 40% market share in the U.S. coconut water category and 82% in the U.K., with a diverse product portfolio including coconut milk and protein-infused drinks [3] - The company's strategy focuses on brand leadership, an asset-light supply chain, and sustainability, with ongoing product innovation such as Vita Coco Treats [4][10] Sales Growth Drivers - Branded coconut water sales rose by 25%, while the "Other" category, including new products, more than doubled revenue from $2.9 million to $6.8 million year-over-year [5][9] - CE volume for branded coconut water increased by 22% in the Americas and 22.9% internationally, although private label products saw a decline of 34% [6] Future Outlook - The company raised its FY2025 net sales guidance to $565–$580 million, anticipating continued growth in branded coconut water and Treats [13] - Management expects gross margin to stabilize around 36% for FY2025, with potential improvements if costs decrease [13] - Non-GAAP adjusted EBITDA is projected at $86–$92 million for FY2025, amid ongoing margin pressures from input costs and tariffs [13]
Vita Coco (COCO) Q2 EPS Beats by 5%