Shares of Vita Coco Company (COCO +2.23%) popped on Monday after the beverage maker said coconut water would likely be among the agricultural products gaining relief from reciprocal tariffs.
As of 1:25 p.m. EST, Vita Coco's stock price was up more than 6% after rising as much as 15% earlier in the day.
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Lower tariffs should make Vita Coco's coconut water more affordable
On Friday, President Trump issued an Executive Order stating that certain agricultural products will no longer be subject to reciprocal tariffs. Tropical fruits and fruit juices were among these products.
On Monday, Vita Coco said it expects its popular coconut water products to be exempt from reciprocal tariffs as of Nov. 13. The beverage company does, however, expect the 40% ad valorem duty -- essentially, a tax based on the declared value of goods -- on imports from Brazil to continue.
NASDAQ: COCO
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In turn, Vita Coco estimates that the average tariff rate for its products arriving in the U.S. will decline to roughly 6%, down from a previous forecast of 23%.
"We greatly appreciate the administration's effort to provide relief to natural resources not commonly grown in the United States, including coconut water," Vita Coco Executive Chairman Mike Kirban said in a press release. "We expect this will enable consumers to continue to enjoy the natural benefits of coconut water at accessible prices."
Vita Coco's profits should receive a boost
The tariff relief is expected to bolster Vita Coco's already impressive growth. The company's net sales and earnings per share rose by 37% and 25%, respectively, to $182 million and $0.40 in the third quarter.
