Vita Coco Reports Mixed Q3 Results, Net Sales Decline 3.7% Amid Private Label Product Sales Drop

The Vita Coco Company, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing mixed performance in revenue and profitability compared to the previous fiscal period.

For the three months ended September 30, 2024, net sales decreased by 3.7% to $132.9 million, down from $138.1 million in the same period of 2023. However, for the nine months, net sales increased slightly by 0.3% to $388.7 million, compared to $387.5 million in the prior year. The decline in quarterly sales was attributed primarily to a significant drop in private label product sales, which fell by 41.6% due to the transition out of coconut oil sales and lower coconut water volumes. In contrast, net sales of Vita Coco Coconut Water increased by 4.8% for the quarter and 3.2% year-to-date, driven by volume growth and net pricing benefits.

Gross profit for the third quarter decreased to $51.6 million from $56.2 million, reflecting a gross margin decline to 38.8% from 40.7% in the prior year. For the nine-month period, gross profit rose to $157.5 million from $140.9 million. Operating income for the third quarter also fell to $20.6 million from $23.5 million, while year-to-date operating income increased significantly to $69.5 million from $51.1 million.

Net income for the third quarter was $19.3 million, up from $15.2 million in the same quarter of 2023, and for the nine months, net income rose to $52.6 million from $39.9 million. Earnings per share for the third quarter increased to $0.34 from $0.27, and for the nine months, it rose to $0.93 from $0.71.

The company’s total assets increased to $353.1 million as of September 30, 2024, from $285.7 million at the end of 2023, driven by higher cash and cash equivalents, which rose to $156.7 million from $132.5 million. Total stockholders' equity also improved to $252.1 million from $202.4 million.

Strategically, Vita Coco signed a lease for a new office in New York, with future payments totaling $15.8 million, and established a line of credit of $920,000 as a security deposit. The company also repurchased 504,246 shares of common stock at a cost of $12 million under its share repurchase program, which has a total authorization of $40 million.

Overall, while the company faced challenges in certain product lines, it demonstrated resilience in its core coconut water segment and continued to strengthen its financial position.