The Vita Coco 2025 Q2 Earnings Strong Performance as Net Income Grows 20%

The Vita Coco (COCO) reported its fiscal 2025 Q2 earnings on Jul 30th, 2025. The company's results exceeded expectations, demonstrating robust revenue growth driven by a significant increase in coconut water sales. In light of this performance, Vita Coco has raised its full-year net sales guidance, anticipating continued growth in the high teens for coconut water sales. Despite inflationary cost pressures, the company remains optimistic about maintaining improved gross margins through strategic pricing actions and efficient supply chain management.

Revenue
The Vita Coco's total revenue rose by 17.1% to $168.76 million in 2025 Q2, reflecting strong growth compared to $144.12 million in the same quarter of the previous year. The Vita Coco Coconut Water segment was a key driver, contributing $140.33 million to the total revenue. The Private Label segment generated $20.91 million, while other product segments accounted for $7.52 million, showcasing the company's diverse revenue streams.

Earnings/Net Income
The Vita Coco's EPS increased by 17.6% to $0.40 in 2025 Q2 compared to $0.34 in 2024 Q2, indicating sustained earnings growth. Additionally, net income rose to $22.91 million in 2025 Q2, marking a 20.0% increase from $19.09 million in the same quarter of the previous year. The company has consistently demonstrated stable business performance over the past five years, with the current EPS indicating positive financial health.

Price Action
The stock price of The Vita Coco edged down 1.74% during the latest trading day, decreased by 3.77% over the most recent full trading week, but has climbed 4.37% month-to-date.

Post-Earnings Price Action Review
The investment strategy focusing on purchasing Vita Coco shares post-revenue increase, then holding them for 30 days, has yielded substantial returns over the past three years. This approach achieved a remarkable 123.32% return, significantly surpassing the benchmark return of 35.67%. The strategy's excess return of 87.65% underscores the effectiveness of concentrating on revenue raise days for gaining profits. With a compound annual growth rate (CAGR) of 23.95%, the strategy demonstrated consistent growth, albeit with moderate volatility marked at 58.37%. Despite exhibiting a maximum drawdown of 0.00%, the strategy maintained a Sharpe ratio of 0.41, indicating a balanced risk-return profile. Overall, while the strategy minimized risk, the inherent volatility should be considered by investors seeking steady returns.

CEO Commentary
Martin Roper, Chief Executive Officer, expressed optimism regarding Vita Coco's strong performance, noting a 17% increase in net sales driven by a 25% growth in coconut water. He highlighted the brand's effective inventory management and market positioning as key drivers, despite challenges like the transition in private label business and inflationary cost pressures affecting gross margins. Roper emphasized the company's strategy of investing in marketing and supply chain resources to support continued growth, particularly in international markets, and underscored the potential of coconut milk-based beverages as an innovative growth avenue alongside the core coconut water business.

Guidance
The Vita Coco Company raised its full-year net sales guidance to between $565 million and $580 million, expecting coconut water sales to grow in the high teens. The company anticipates gross margins around 36%, with SG&A costs increasing in the low- to mid-single digits. Roper indicated a strong third-quarter performance as the company laps previous inventory shortages, while also noting the potential for sequential improvements in gross margins in the fourth quarter, driven by mitigating pricing actions and a return to historical ocean freight rates.

Additional News
Recently, The Vita Coco Company announced the expansion of its coconut juice lineup with a new Piña Colada flavor, providing a tropical experience just in time for summer. The company also participated in the Goldman Sachs Global Staples Forum on May 13, 2025, showcasing its growth and innovation strategies. Furthermore, Vita Coco organized a nostalgic mall pop-up event in New York City in May, collaborating with Limited Too to offer a unique Y2K era experience, highlighting its brand's creativity and market engagement.