The Vita Coco Company, Inc. Q3 FY2025 earnings call

• Mike Kirban thanked colleagues for strong performance, noted coconut water category growth (22% YTD in US, 32% in UK, over 100% in Germany), and improved inventory position.
• Martin Roper discussed net sales growth (37% QoQ), price increases in the US to cover costs and tariffs, Walmart set changes, private label business outlook, and cost of goods stability with some softening in ocean freight.
• Corey Baker provided financial details: net sales up 37% to $182 million, gross profit $69 million, gross margin 38%, net income $24 million, and raised full-year net sales guidance to $580-$595 million with adjusted EBITDA guidance $90-$95 million.

In the Americas, Vita Coco Coconut Water increased net sales 41% to $132 million, while private label decreased 13% to $14 million. The other product category grew 182% primarily due to the national launch of Vita Coco Treats. Internationally, net sales were up 48% with Vita Coco Coconut Water growing 47%, and private label sales increased 70% due to strong sales within the current customer base. Vita Coco Coconut Water in the Americas saw a 30% volume increase and an 8% price/mix benefit, driven by two price increases in 2025.

• Raised full-year net sales guidance to between $580 million and $595 million.
• Expect full year gross margins of approximately 36% with higher finished good costs offset by increased pricing and slightly lower logistics costs.
• Adjusted EBITDA guidance raised to $90 million to $95 million due to higher net sales and gross profit, partially offset by higher SG&A expenses.

• Tariffs: Impact from baseline 10% and August tariffs, with potential further tariffs to consider.
• Ocean freight: Still elevated relative to historical levels though softening, with spot rates and fixed price arrangements used.
• Competitive actions: Uncertainty around competitor moves and private label service issues as the category accelerates.

Q: Bonnie Herzog asked about guidance, private label wins, etc.

A: Michael Kirban discussed top-line growth trends, private label as complementary, and EBITDA embedding tariffs. Martin Roper and Corey Baker addressed tariff impact on Q3, pricing outlook, and international growth.

Q: Chris Carey inquired about Brazil tariffs, pricing, and international capacity.

A: Michael Kirban and Martin Roper talked about Brazil tariff uncertainties, pricing monitoring, and international capacity expansion.

Q: Robert Ottenstein asked about international market details, margin, and quarter flattery.

A: Martin Roper provided insights on international markets, margin differences, and strong demand in Q3.

Q: Christian Junquera clarified tariff impact and ocean freight expectations.

A: Corey Baker and Martin Roper explained tariff calculation, ocean freight mitigation, and margin outlook.

Q: Jon Andersen asked about ocean freight, guidance seasonality.

A: Michael Kirban and Martin Roper discussed ocean freight as a component of costs and guidance seasonality due to promotions and private label trends.

Q: Michael Lavery asked about capital allocation and Treats.

A: Martin Roper and Michael Kirban talked about capital allocation priorities and Treats as a gateway for new consumers.

Q: Eric Serotta inquired about pricing competitors and Treats repeat purchase.

A: Michael Kirban and Martin Roper discussed competitor pricing strategies and Treats' repeat purchase and future growth.

Q: James Salera asked about growth composition and margin outlook.

A: Martin Roper explained growth as a balance of new households and increased consumption, and margin considerations with tariffs.

Q: Eric Des Lauriers asked about tariff lobbying and marketing spend.

A: Martin Roper and Michael Kirban discussed tariff lobbying efforts and marketing spend tracking net sales.

Q: Gerald Pascarelli asked about tariff rerouting and trade discussions.

A: Martin Roper and Corey Baker talked about tariff rerouting process, timeline, and positive trade discussion hopes