By Sam Boughedda
The Vita Coco Company Inc (NASDAQ:COCO) tumbled Wednesday after it missed analyst consensus expectations for earnings in the fourth quarter.
The beverage firm posted a wider-than-expected loss of $0.05 per share in the quarter, $0.09 worse than the analyst EPS estimate of $0.04. However, revenue topped expectations, coming in at $92 million versus the consensus estimate of $90.45M.
The company's net sales growth of 6% compared to the same period last year was driven by Vita Coco Coconut Water's growth of 4%.
"Gross margins for the quarter benefited from front-line pricing actions during the year but were impacted by temporary supply chain costs related to our inventory build," said Martin Roper, the Company's Chief Executive Officer. "We have seen these inventory-related expenses recede during the first months of 2023. By the end of the year, we expect inventories to return to more normal levels."
COCO shares are down more than 5% at the time of writing.
Looking ahead, it expects full-year 2023 net sales growth of approximately 9% to 11%, with its gross margin seen between 32% and 34%. In addition, COCO is forecasting FY23 adjusted EBITDA in the range of $52M to $58M.
Reacting to the report, Goldman Sachs analysts maintained a Buy rating and $15 price target on the stock.
The analysts said COCO "mgmt's FY23 topline guidance of 9-11% is broadly below the company's mid-term growth algo and below our/cons estimates into the print, while adj. EBITDA guidance of $52-58M was ahead of our/cons ests."
"Despite near-term headwinds, we continue to believe margins have significant room to improve from here while healthy topline growth this year is driven by momentum through increased household penetration rates, distribution gains, price increases, and a strong pipeline of innovation," the analysts wrote.