Financial Data and Key Metrics Changes - Net sales increased by $25 million or 17% year-over-year to $169 million, driven by a 25% growth in Vita Coco Coconut Water [20][23] - Gross profit for the quarter was $61 million, an increase of $3 million compared to the prior year, with gross margins at 36%, down approximately 450 basis points from 41% in Q2 2024 [19][21] - Net income attributable to shareholders was $23 million or $0.38 per diluted share, compared to $19 million or $0.32 per diluted share for the prior year [20][21] Business Line Data and Key Metrics Changes - Vita Coco Coconut Water grew 25%, while the private label segment saw a decline of 25% [20][23] - The international segment reported a 37% increase in net sales, with Vita Coco Coconut Water growing 43% [18][19] - Other products, primarily from Vita Coco Treats, experienced a 102% growth [11] Market Data and Key Metrics Changes - Coconut water category grew 20% year-to-date in the US and 35% in the UK [5] - Vita Coco Coconut Water grew 16% in retail dollars in the US and 39% in the UK year-to-date [6] - The international business is expected to become a larger part of the consolidated growth story, with European operations potentially matching the size of the Americas business [9] Company Strategy and Development Direction - The company is focusing on expanding its product offerings, including Vita Coco multipacks, organic products, and the national launch of Vita Coco Treats [6][7] - There is a strong emphasis on increasing investments in select European markets to drive long-term growth [7][9] - The company aims to double the US coconut water category in the coming years, indicating significant long-term potential [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current environment, citing strong category growth and brand performance [25] - The company anticipates a strong third quarter due to improved inventory levels and reduced promotional activity from the previous year [14][23] - There is an expectation of gross margins improving sequentially in Q4, despite short-term pressures from tariffs and freight rates [24][80] Other Important Information - The effective tax rate for Q2 2025 was 19%, down from 25% the previous year, primarily due to discrete tax benefits [21] - The company raised its full-year net sales guidance to between $565 million and $580 million [23][24] - Management is focused on maintaining strong branded growth momentum into 2026 [24] Q&A Session Summary Question: How much of the revenue growth is due to inventory rebuild versus same-store sales trends? - Management indicated that while retail scan data reflects healthy inventory, it is not solely due to easy comparisons from the previous year [28][29] Question: Can you provide insights on the contribution of Vita Coco Treats? - Vita Coco Treats was rolled out nationally at the end of Q1, contributing positively to total branded scan volumes [30][31] Question: What are the expectations for gross margins and EBITDA guidance? - Management noted that gross margins are expected to be approximately 36%, with some pressures from higher ocean freight rates and tariffs impacting the outlook [41][44] Question: How is the company addressing potential higher tariffs? - The company is currently operating under a 10% baseline tariff and is focused on growth while preparing for potential changes in tariff rates [59][60] Question: What is the strategy for private label sales moving forward? - Management acknowledged the complexity of private label sales but indicated that Q2 reflects known losses, with expectations for modest growth in the future [68][70] Question: What is the timing for Walmart's shelf resets? - The expected timing for Walmart's shelf resets is around September to October, with clarity anticipated in early Q4 [72][73]

Financial Data and Key Metrics Changes - In Q1 2025, net sales increased by $19 million or 17% year-over-year to $131 million, driven by a 25% growth in Vita Coco coconut water net sales [22][24] - Gross profit for the quarter was $48 million, an increase of $1 million compared to the prior year, with gross margins at 37%, down approximately 550 basis points from 42% in Q1 2024 [23][24] - Net income attributable to shareholders was $19 million or $0.31 per diluted share, compared to $14 million or $0.24 per diluted share in the prior year [24] Business Line Data and Key Metrics Changes - Vita Coco coconut water net sales increased by 25%, while private label sales decreased by 12%, with private label coconut water experiencing a 10% growth offset by a decline in coconut oil [22][24] - The other product category saw an 84% growth, primarily due to the positive impact from Vita Coco treats [15][24] - In the Americas, Vita Coco coconut water net sales increased by 24% to $86 million, while private label decreased by 13% to $21 million [22] Market Data and Key Metrics Changes - Vita Coco coconut water grew by 20% in retail dollars in the US and 21% in the UK during Q1 2025 [10] - The coconut water category is one of the fastest-growing beverage categories, with growth rates of 23% in the US and 19% in the UK [9][10] - The international segment reported a 17% increase in net sales, with Vita Coco coconut water growing by 36% across major markets [23] Company Strategy and Development Direction - The company aims to grow the Vita Coco brand by expanding the coconut water category and innovating around core offerings [8] - International growth is a priority, with significant investments planned for the UK, Germany, and other European markets [13] - The company is exploring innovation in adjacent categories and potential M&A opportunities to enhance shareholder value [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the coconut water growth trajectory, citing a strong inventory position and positive retail programming [14][21] - The company anticipates that the coconut water category will continue to grow, with expectations of doubling the category in the coming years [13] - Management is confident in navigating the current environment, including potential tariff impacts, due to a diversified sourcing strategy [20][21] Other Important Information - The company has a strong balance sheet with total cash on hand of $154 million and no debt under its revolving credit facility [26] - The board approved an additional $25 million for share repurchases, increasing the total authorization to $65 million [26][27] - The company expects net sales for the full year 2025 to be between $555 million and $570 million, with gross margins projected at 35% to 37% [27][28] Q&A Session Summary Question: Can you elaborate on your mitigation efforts regarding tariffs? - Management indicated that they entered the year with healthy inventory, which helps delay tariff impacts. Mitigation efforts include continuous cost improvements and potential pricing adjustments to offset tariff costs [34][35][36] Question: What is the expected impact of pricing on demand? - Management plans to take pricing to cover the unmitigated costs of tariffs, with expectations that the category's health will support consumer acceptance of price increases [41][42][56] Question: How is the company planning to grow internationally? - The company is investing in both marketing and supply chain resources to support growth in international markets, emphasizing the need for boots on the ground to establish relationships with retailers [89][90] Question: What are the drivers behind higher finished goods costs? - Higher finished goods costs are attributed to new factory setups and increased ocean freight rates compared to the previous year [59][63][65] Question: How flexible is the company in adjusting sourcing in response to tariffs? - The company is well-positioned to adapt sourcing strategies, with a lead time of 12 to 24 months for new factories, but can reallocate supply more quickly between markets [97][100][102]

Financial Data and Key Metrics Changes - In Q1 2025, net sales increased by $19 million or 17% year-over-year to $131 million, driven by a 25% growth in Vita Coco coconut water net sales [23][26] - Gross profit for the quarter was $48 million, an increase of $1 million compared to the prior year, with gross margins at 37%, down approximately 550 basis points from 42% in Q1 2024 [25][26] - Net income attributable to shareholders was $19 million or $0.31 per diluted share, compared to $14 million or $0.24 per diluted share in the prior year [26] Business Line Data and Key Metrics Changes - Vita Coco coconut water net sales increased by 25%, while private label sales decreased by 12%, with private label coconut water growth of 10% offset by a decline in coconut oil [23][26] - The International segment saw net sales up 17%, with Vita Coco coconut water growing 36% across major markets [25] Market Data and Key Metrics Changes - Coconut water category growth was reported at 23% in the US and 19% in the UK for Q1 2025 [8] - Vita Coco coconut water grew 20% in retail dollars in the US and 21% in the UK [10] Company Strategy and Development Direction - The company aims to grow the Vita Coco brand by expanding the coconut water category and innovating around core offerings [7] - International growth is a priority, particularly in underdeveloped markets like Germany, which saw a doubling of volume sold compared to the same quarter last year [7][13] - The company is exploring innovation in adjacent categories and potential M&A opportunities to enhance shareholder value [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about branded coconut water growth in 2025, supported by a stronger inventory position and retail programming [10][14] - The company anticipates that international operations will eventually match the size of its American business [14] - Management is confident in navigating the current environment, including potential tariff impacts, due to a diversified sourcing strategy [21][22] Other Important Information - The company has a strong balance sheet with total cash of $154 million and no debt [28] - Share repurchase program has been increased to $65 million, with $23 million already utilized [28] Q&A Session Summary Question: Guidance for the year and mitigation efforts regarding tariffs - Management confirmed that the guidance includes the 10% baseline tariff and discussed ongoing cost-saving initiatives and potential pricing adjustments to offset tariff impacts [36][39] Question: SG&A growth guidance - The slight increase in SG&A growth guidance reflects a broader range due to uncertainty, with investments focused on marketing and team expansion [42][45] Question: Supply availability for growth - Management indicated that while coconut supply is abundant, planning and timing are critical for scaling operations [56][57] Question: Pricing strategy amidst growth - The company plans to take pricing in response to cost increases, balancing the need to maintain brand momentum [58][59] Question: Drivers of higher finished goods costs - Higher finished goods costs are attributed to new factory setups and elevated ocean freight rates compared to the previous year [62][67] Question: Shelf space and distribution strategy - The company expects improved shelf space and distribution gains, particularly in convenience stores and through successful product launches [114][116]