What happened
Shares of coconut-water purveyor The Vita Coco Company (COCO +1.25%) were moving higher today after the beverage stock delivered another strong earnings report, beating estimates on the top and bottom lines.
As of 11:43 a.m. ET, the stock was up 13.7%.
Image source: Getty Images.
So what
Vita Coco said sales in the quarter jumped 21% to $139.6 million, easily beating analyst estimates at $129.3 million. Volume in the flagship brand Vita Coco coconut water was up 19% with sales up 23%.
The company also delivered a tremendous gross margin expansion, improving 11 percentage points to 37% due to lower year-over-year transportation costs, high pricing, and leverage from sales growth. Selling, general, and administrative expenses, meanwhile, rose 25% to $30 million due to higher personnel expenses and increased sales and marketing expenses.
On the bottom line, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved from $7 million to $24 million and adjusted earnings per share jumped from $0.02 to $0.31, well ahead of the consensus at $0.18.
CEO Martin Roper said he was "extremely pleased" with the results, adding that gross margin "exceeded our expectations."
NASDAQ: COCO
Key Data Points
Now what
Looking ahead, the company raised its guidance for the year. It now expects sales growth of 10%-12%, including mid-teens growth in the Vita Coco brand, which will offset the loss of a private-label customer.
It also called for further improvements in gross margin relative to second-quarter performance and sees full-year gross margin at 35%-37%. Additionally, management raised its EBITDA guidance from $54 million-$59 million to $56 million-$60 million.
Given the strong quarterly results and the guidance raise, it's not surprising to see Vita Coco stock moving higher today. The beverage stock appears to have a bright future in front of it as there's a large and growing market for healthy beverages.
