Q2 2024 Vita Coco Company Inc Earnings Call Transcript
Key Points
- The Vita Coco Co Inc (COCO) achieved net sales growth of 3% in the second quarter of 2024, driven by both branded and private label Coconut Water growth.
- The company reported strong gross margins of 41% in the quarter, an improvement of approximately 400 basis points over the previous year.
- Vita Coco brand grew 11% in the US and 19% in the UK year-to-date, with accelerated growth in the second quarter.
- The Vita Coco Juice product line continued to perform well, growing 27% year-to-date in convenience stores.
- The company has a strong cash position with $150 million on hand and no debt, allowing for potential M&A opportunities and share buybacks.
- The company's net sales performance was hampered by supply chain challenges, including significant reductions in container availability and extended transit times.
- Ocean freight market volatility, particularly in the second quarter, led to increased costs and impacted the company's ability to meet demand.
- Inventory levels are very tight and well below normal, constraining shipments and potentially affecting retail availability.
- The company expects a more significant impact on gross margins in the third and fourth quarters due to increased ocean freight rates.
- The guidance for the full year reflects uncertainty in transportation costs, with an estimated $15 million increase in transportation costs expected in the second half of the year.
Hello, and welcome to the Vita Coco Company's Second Quarter 2024 earnings conference call. My name is Karen. I'll be coordinating your call today. Following prepared remarks, we will open the call to your questions with instructions to be given at that time. I'd now like to hand the call over to John Mills with ICR.
Thank you, and welcome to the Vita Coco Company's second quarter 2024 earnings results conference call. Today's call is being recorded. With us are Mr. Mike Kirban, Executive Chairman, Martin Roper, Chief Executive Officer; and Corey Baker, Chief Financial Officer.
By now, everyone should have access to the company's second quarter earnings release issued earlier today. This information is available on the Investor Relations section of the Vita Coco Company's website at investors.thevitacococompany.com. Also on the website, there is an accompanying presentation of our commercial and financial performance results.
Certain comments made on this call include forward-looking
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