Vita Coco’s second quarter results were met with a negative market reaction, despite revenue and non-GAAP earnings exceeding Wall Street expectations. Management attributed the quarter’s revenue growth to strong demand in core coconut water products, rapid expansion in international markets, and the rollout of new beverages like Vita Coco Treats. CEO Martin Roper noted, “Net sales in the quarter were up 17%, driven by growth of the Vita Coco Coconut Water up 25%,” highlighting the influence of both category expansion and improved supply chain execution. However, gross margins declined from last year as inflation and higher freight costs weighed on profitability.
Is now the time to buy COCO? Find out in our full research report (it’s free).
Vita Coco (COCO) Q2 CY2025 Highlights:
- Revenue: $168.8 million vs analyst estimates of $161.3 million (17.1% year-on-year growth, 4.6% beat)
- Adjusted EPS: $0.42 vs analyst estimates of $0.36 (14.6% beat)
- Adjusted EBITDA: $29.24 million vs analyst estimates of $28.52 million (17.3% margin, 2.5% beat)
- The company lifted its revenue guidance for the full year to $572.5 million at the midpoint from $562.5 million, a 1.8% increase
- EBITDA guidance for the full year is $89 million at the midpoint, below analyst estimates of $90.76 million
- Operating Margin: 14.9%, down from 20.8% in the same quarter last year
- Sales Volumes rose 14.1% year on year (4% in the same quarter last year)
- Market Capitalization: $1.84 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Vita Coco’s Q2 Earnings Call
- Kaumil S. Gajrawala (Jefferies) asked how much of the revenue growth stemmed from inventory rebuild versus underlying demand. CEO Martin Roper explained that healthy inventory played a role, but most growth was due to rising household penetration and consumption per household.
- Bonnie Lee Herzog (Goldman Sachs) questioned why EBITDA guidance did not rise with higher sales expectations. CFO Corey Baker indicated the outlook reflected increased cost pressures, including ocean freight and tariffs, and timing of price increases, which would weigh on margins.
- Christian Junquera (BofA) inquired about the impact of potential tariff increases on profitability. Roper clarified that only the 10% baseline is assumed in guidance and that further tariff changes would be managed through mitigation, though specifics remain unclear due to policy uncertainty.
- Eric Des Lauriers (Craig-Hallum Capital Group) sought clarity on private label trends and the outlook for this segment. Roper acknowledged recent contract losses but highlighted new wins for 2026, cautioning that private label results will remain volatile.
- Robert Edward Ottenstein (Evercore ISI) asked about demographic and channel targets for marketing spend. Executive Chairman Michael Kirban described a focus on young, multicultural consumers and increased emphasis on sports drink positioning, with similar strategies in Europe but more category education.
Catalysts in Upcoming Quarters
For the upcoming quarters, the StockStory team will be monitoring (1) the rollout and performance of Vita Coco Treats in additional U.S. and international retail channels, (2) management’s ability to offset cost inflation and tariff-related margin pressures through supply chain and pricing actions, and (3) progress in expanding distribution with large partners like Walmart and private label wins for 2026. The pace of international category development and normalization of freight rates will also be important markers.
Vita Coco currently trades at $32.31, down from $36.77 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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