Vita Coco keeps the momentum flowing with another strong quarter, hikes guidance again

[Branding - LFW September 2016]
Tim P. Whitby/Getty Images Entertainment

Strong demand for coconut water fueled another solid quarter [https://seekingalpha.com/news/4510118-vita-coco-gaap-eps-of-0_40-beats-by-0_11-revenue-of-182_32m-beats-by-25_52m]for Vita Coco (COCO [https://seekingalpha.com/symbol/COCO]), with better-than-expected results and a raised FY25 outlook pushing shares up more than 9% in early trading.

“Our increased full year net sales guidance is based on [strong momentum in demand for coconut water], and on delivering high teens _Vita Coco_ Coconut Water full year growth. Even though the applicable tariff rates have increased since we last reported earnings, our strong topline growth and operational execution support our raised full year adjusted EBITDA guidance,” CEO Martin Roper said.

A 42% increase in Vita Coco Coconut Water along with the rollout of Vita Coco Treats drove a 37.2% increase in net sales for the quarter to a better-than-expected $182.32M, while net income increased by 25% to $0.40 per share, beating the consensus estimate by 11 cents.

Unfortunately, higher costs associated with finished goods and tariffs compressed the company’s gross profit margin by 100 basis points to 38%.

On the balance sheet, the company’s financial position remained strong with no debt and cash and cash equivalents of $204M, up from $165M at the start of the year. Inventory levels remained healthy at $84M, roughly unchanged from a year ago. Accounts receivable increased to $103M from $63M at the end of last year, primarily due to increased net sales and the seasonality of the business.

For FY25, Vita Coco (COCO [https://seekingalpha.com/symbol/COCO]) raised its sales outlook again to a range of $580M and $595M from the prior range of $565M and $580M, with the midpoint of the new range -- $587.5M – exceeding the consensus estimate of $583.56M.

Adjusted EBITDA is expected to be in the range of $90M to $95M from the earlier range of $86M to $92M, while expected gross margin remains unchanged at 36% with the impact from tariffs partially offset by pricing strategies and lower logistics costs.

MORE ON VITA COCO

* Vita Coco: Healthy Business And Growth Potential [https://seekingalpha.com/article/4832351-vita-coco-stock-healthy-business-growth-potential]
* The Vita Coco Company: Still On Hold Until The Trade Situation Uncertainty Is Over [https://seekingalpha.com/article/4810899-the-vita-coco-company-still-on-hold-until-the-trade-situation-uncertainty-is-over]
* Vita Coco Q3 2025 Earnings Preview [https://seekingalpha.com/news/4509404-vita-coco-q3-2025-earnings-preview]
* Vita Coco tariff-fueled sell-off overdone given mitigation levers - Piper Sandler [https://seekingalpha.com/news/4487215-vita-coco-tariff-fueled-sell-off-overdone-given-mitigation-levers]
* Seeking Alpha’s Quant Rating on Vita Coco [https://seekingalpha.com/symbol/COCO/ratings/quant-ratings]