The Vita Coco Company, Inc. (COCO) 31 Oct 232023 Q3 Earnings call transcript

Hello, and welcome to the Vita Coco Company's Third Quarter 2023 Earnings Conference Call. My name is Didi. I'll be coordinating your call today.

Following prepared remarks, we will open the call to your questions with instructions to be given at that time.I'll now hand the call over to Clay Crumbliss with ICR.

Thank you, and welcome to the Vita Coco Company's Third Quarter 2023 Earnings Results Conference Call. recorded.With Mr. being is call us are Today's Mike and Corey Chairman; Martin Executive Officer; Roper, Chief Baker, Kirban, Executive Chief Financial Officer. should issued everyone quarter now have the to By company's earnings release earlier today. access third Coco available on relations the investors.thevitacococompany.com. This information Company's the at is website section investor of Vita Litigation and call the Also on Securities include the which subject to commercial forward-looking harbor XXXX. is results.Certain provisions comments Private presentation of an statements Act the performance accompanying made safe of website our there of financial Reform on this are a statements are release concerning statements in that described of expressed differ the forward-looking the and from risks today.Also, materially factors SEC subject the to based actual These business describe to expectations forward-looking more those on call, those cause press uncertainties measures will the some and discussion performance. future any risk made to these filings with results management's forward-looking beliefs in could detailed and are non-GAAP could results from that current financial cause use statements.Please as actual events, differ refer and we we materially during or today's implied several for to over that, release filings my most measures of as Chairman, Mike. well SEC earnings supplementary Mike it's turn all available to our to the are call reconciliations Kirban, as and The presentation with earnings pleasure directly website provide the press well.And measures as financial Co-founder GAAP non-GAAP and and the comparable our the Executive on to

Matter the Company. their incredible our XXXX. dedication to recognition we category colleagues expectations. and want for work ethical, want the of by continued is our expectations we recently full Thank that all performance joining financial our for communities That you quarter their us current This for Fast better-for-you beverages today by coconut team our entire of beverage Clay commitment for results globe according discuss America's received Thanks, the addressing uplift third performance.I to enabled sustainable, a our thanking by good to creating and mission our Company's a and is track by to Vita Brands planet.Before of which morning, the to XXXX testament year our Coco to as functional XXXX right one start that everyone. water, strong do category excess in and our in reiterate the We to I within position of $XX better-for-you channels believe leadership in Circana. billion have strategic across and

the share our focus success category period same growth versus with the leading energy, few to the improving water U.S. while of our our sales supporting XX% quarter, marketing the net CSDs, the water to We prior consolidated with last believe the with I'm sales we're the our one growth being sales benefiting XX% both up growth our initiatives Circana from multipack strategy progress and we Vita price.For categories net is bottled is category growing retail major to growing increased year We XX%. We quarter the market healthiest coconut and dollar that year, bullish on is about We one performance to coconut commercial our be occasions working. efforts.In water and is initiatives XX%, volume that XXXX. the while rates are coconut excited outperforming the sports Coconut growth. the like growth happy our third believe growth in marketing our trends water XX%. saw beverages, also year-to-date and Coco we're making in United the dollar coconut through in very bringing continue of of brand Water where posting categories of And delivering in usage against water growth according with drinks, States, remain category our in very category

expansion extremely has an on experience Our the million and focus our Roblox occasion-based via Coconut and on driving farm impressions Roblox the built stronger harvest million where initiatives virtual to and our successful on can been continued to immersive coconuts. brand consumers activation, the us throughout Over consumers never our visit Grove, people has generation consumer new a date, brand. quarter, introducing the XX XX we over in metaverse, of summer.In

partner perfectly impressions over brand content.Finally, of Martin, successful partnering our as PR superstar Hamptons may partnership locations. and very channels Day a Spotify, update cocktails, amplified and over this cement that high-profile social targeted execution has through to Open, with cocktail Coco's also million an other hydration-occasion a and announced summer To Casa Chris on the to label songwriter, combined quarter award-winning to and mixer. outstanding continuing Vita business. We She Becky's several million followers hangover prestigious was the as role core G. targeted grow activation handing approach social tennis X.X of be Eubanks We million recently private influencer saw at I'd players XX.X our brand.Before national authentic came values. event.Our occasion to initiative on the Tu community-first impressions like broad delivering this aligns Mi those call many with Becky Mexican-American and we we too Labor provide off with excited enjoyed impressions first tour. with over result incredible actress, We with her singer, be capture generating our XXX in to over a our our U.S. cannot our with activist, American more XXX Casa, million this at artist

had indicated potentially cease the customer happening second call, early private during quarter a supply we major on expected the with coconut of quarter to as our and to fourth transition As we label water private as coconut XXXX. oil, earnings label

continue transition. support we and our to update, label now that needs, customer branded we has products, of important a Since a smooth chain our significant reflective portion continue this to is their business this commitment last continue expressed and partnership, and a indicated valuing expect also time. over private their outstanding our of customer coconut prior believe is We is our supplying key we and that quality.This for requested this further for significant that water we with we reliability label are excited our private and partnership our to this supply it the expand decision expectations ways customer, change for a its explore to to

brands Chief the with as turn retailer could on and health execute of versus into reiterate is significantly the an my new opportunities, the financial As one relationships, of globe.Finally, to year I'd Executive of label now commercial We benefit label the we and uniquely of our our the and of brands to that call best growth came from talent the long-term capabilities I'll quarter accomplishments acquirer in in from that supply that our the profitable same period our in of complementary our this revenue our world, further are beverage chain to last We're for to one over up evidence third Martin our investments few as companies this resources.And capabilities, outside business. of our the Officer, benefits of and in like the the positioned maintain accounts believe including the to all for relationships and the customer, size act the private fast-growing, new Roper. stepping and XXXX. of momentum beverage around year balance growth, excitement major year private

Thanks, Mike, good morning, and everyone.

third Coconut of Coco driven Water growth Water sales For sales This net by last strong quarter X%. Vita quarter of net Vita very achieved where growth third strong the Coco XX% grew XXXX, XX%. performance year, was we a achieved of Coconut against

tracked volume scan performances rate.The with deck dollar as in Water in strength data, growth believe rate third Circana Vita of that investor potential. growth and Our indicative strong regions our all consumer future XX% underdeveloped Coco in execution we a to our produce XXXX growth a with and efforts in quarter strong shown the continue Coconut channels strong engagement XX% in of U.S. results is retail across

velocity net Coco a revenue resulting our growth distribution the pricing, are strong net and quarter. healthy As balance private Vita investor of in revenue we shown is growth net sales Internationally, built seeing deck, growth, in for growth and international the XX% label, on continued growth, in gains.

full year million. transportation coconut started a seen very Coco for our seasonally environment at this improvement XX% of more includes total coconut expectations the in the will long-term see Vita guidance fourth third spot our the in of lanes recent business quarter, quarter very water XX% quarter to strong X-week of costs months. over the with quarter, raising over Coconut label for improved rates XXXX are the and costs cost was according the trends, call The private label strong XX%, stable by pre-COVID represents second this Vita transportation this Financial and margin continue that, our XXXX, year $XX strong an mentioned, the healthy EBITDA really reduced we of on freight most scans Coconut first Mike retail to by million along in reflected to retention XX% second most pricing, retail growth of primarily being details year, Vita Baker, category quarter Officer. over over with driven goods for for this in This for to earlier risen over outlook. adjusted now the the more our of close and Coco the more the year, performance full last turn spot second results, We're our growth was year, on And in with to retail. mix I slightly has year prior our of on significant to Circana raising Water outlook. Corey to quarter's the XX% Based guidance increase and we to we higher historic happy which decrease fully Coco significant third $XX We and over provide current the levels.Turning a reported goods, pricing.After to water that of share to over pricing. year last due X excited half to for private ocean revenue our last Water reported offset are U.K., and XXXX. period.Turning have margins. dollar the Chief Vita XX% the in that lower At our Coco the future.With the will third end the Building and label year the time year-to-date were rates our cost Corey year. of quarter in to normal third last increase branded quarter current private our was In the improvement which gross of

I the Thanks, everyone. Martin, third additional financial full some our year.Starting improved results quarter for XXXX revenue. and and good details morning, of on now will with the outlook drivers provide the

with We sales growth Water was of million see and the performance net or $XXX in million, XX%. driven Coco $XX by continue strong increase third growth Vita of to representing label Coconut quarter year-over-year. This of X% private an XX% of

XX% price with existing Vita which The growth Vita of over strong label to with $X million X% quarter, demand, Water in Water quarter.Private of label strategic the of volume in from in visible for believe year now Coconut service, in and retail our private Coconut quality where saw chain retail million of outside Water Coco of that benefited sales our net our a occurring X performance and the continued private from customer America's resulted reflected better an while stores remains We volume businesses. and led segment, of net underlying and driving expanded growth for ahead elasticity of in performance by and which expanded Private and benefit. net experienced Coco of XX%. and $XX volume and growth has the strength Coconut category last of growth our wins for X% to Within in the of inventory our negatively net America customer, a timing Coco distribution growth versus our that growth of at over revenue private increased distribution shifts We customer was of distributors. demand XX%. period, believe XX% million. $XX our XXX% the Vita in the branded year-to-date underlying retail new grown consumer reductions label portfolio label and normal dollar years, consumer benefited on quarter $X net XX% wins, sales in impacted be Year-to-date private quarter trends mix year-on-year reported the strong the price performance private largest customer label generated new sales, branded million the consumer of prior as approximately that velocity strong combination the of label.We proxy are sales product U.S. growth strong opportunities, volume XX% label levels orders private are is supply performance gains a of both the shipments. reflected our for increase label retail growth

to continue global quarter, led third versus share label quarter also as to remains Our continue continued strength the strong in well. operate spike Europe. supply in Coco retailers last gross of on distribution led by up of years.Moving expenses. XX% XX%, where, XX%, was Growth the retail.For our $XX and had million, at with in cost year pricing chain Coconut Water operating the and in Vita Martin benefit International to our consolidated transportation sales a prior by net gross from the and the were efficiency growing Western we X% perform improvements margin growth high U.K., as very profit up a unusual up by to segment million relative prior gain to mentioned, quarter, net up private sales Reported was with was XX%. new X from strong $XX led strategic year level

and million costs. people reflects year $XX quarter increased marketing Third in over investments SG&A prior XXXX by which increased costs million, the $X to

SG&A we ahead our spend to previously slightly market see as pressured.In margin lower expected expenses initial we in in quarter, As now the acceleration investments sales includes an as full year in execution we an spending when year-to-date invest marketing increase versus of have indicated, plan our the and of with XXXX revenue. the begun were spending third

we consumer the to our with the pleased response investments, very of to year. are through We balance continue which plan the

per ETR EBITDA million unrealized instruments. related $X quarter.Non-GAAP derivative XX.X% increase loss of QX net QX balance $XX equivalent, $XX on compared spending.Turning was the $X organizational rate elevated to of for margin our year-over-year volume diluted the And $X XXXX adjusted prior increased by to SG&A quarter million by benefited The partially up or see growth our an $XX expect and our income a in for tax SG&A and a $X.XX million to cost we period. XXXX per in $X.XX million, share increase a as of income to increased in We attributable investments.Net growth in complete net offset million increased primarily million, was in and diluted due and quarter or cash reduction improvements gross share in year costs for third from million per the relative partially previously, $XX sales net to sales reflecting continued the was an from to of positive shareholders marketing pricing, Net spending XXXX. goods discussed case of QX sheet planned to flow. and the offset and

of of with operating hand cash led in to As as of income December strong an performance million of year-to-date the hand accounts our million $XX payments has of payable normal The of increase to $XX $XX as XX, customer were seasonality of by driven million manage total supply days of our in cash improvement due compared and reductions result to inventory increase global net the reduce provided of decreases in of million million XXXX, on and XXXX. flow, chain, The cash volume by business. inventory inventory. our accounts year-to-date to overall growth, receivable has on total $XX cash resulting $XX on efficiently in us a million a offset increases normalization capital and decrease timing XX, more in hand in $XX the was and allowing inventory.Working coupled net September sales was

targeted range. low the of end ended QX at inventory our Our

year increase full now to to expectation demand Based the us guidance that and guidance more the allowing confident growth current strong business, year.Looking XXXX, We the private is which, year XX% from label expect peak. raise to full we margin plus XX%. we QX quarter.Our remains have gross by of continued expectation inventory at which sequentially of reduce the our hand said, for XX% branded sales the to mix unchanged business, benefiting its our balance on change impact is year mid-teen full relationships end despite and of difficult consumer for of the is business, label last days The our to XX%. from as our retention transition leading new margins growth we the relationship business comps, in plans private in for multiyear the branded on on expected and plus to the our QX to of net of remain our disclosed to

brand. Our million growth year revised XXXX, confident in our strength SG&A, non-GAAP net guidance prospects prudent EBITDA to business of to momentum our by adjusted $XX excited look leading million. This the EBITDA we continued growth in forward remain above investment growth.As sales our adjusted and our the $XX business we full to for reflects and remain is

transition While our preliminary net XXXX, to revenue update our mid-teens that of collectively current over talked percentages early be planning approximately the grow lots adjusted year negative margin net we which last produce still XXXX we EBITDA guidance. moving with revenue pieces, in gross about with single-digit XXXX our the modeling, to expected that low estimated want quarter. versus very of flat believe now should full should percentage of impact private XXXX we label In growth

repurchase deploy full on flexibility the million of common Board it strategically XX, guidance on to program, of as report XXXX, XXXX company's the our in The numbers.Finally, $XX year in increased over for stock. our repurchase capital we company his behalf authorization our now XXXX remarks. earnings company's the a past, year up when us Directors first October approved the done closing our we full share release, noted have authorizing we As to turn will provide of to to gives Martin shareholders.I will

I'd and third To Company, Vita questions. in of ability our Coco Thank long-term for you, you we Vita our Coco and confidence will your Thank build in take beverage brand. potential and the joining today, to better Corey. to Vita our now you us platform close, of strength Coco concludes reiterate prepared like thank the the the a Company.That remarks, for interest quarter our

from [Operator Our comes of Blair. first question Instructions] Jon Andersen William

to branded by asking variance just wanted I the measured the in the between Americas growth in XXs about start channels of X%. consumption the growth and

I could there wondering little the are in fourth caused and color provide you prepared around what more we consumption? was of shipments that and relative to kind into you beyond think the referenced bit if timing it quarter I the your that? comments. difference expectations And look as a

we We did the then the Yes, shipments impacted year, that ultimately And Jon. on in channel the slip a a full provided scanned our on we And quarter. We overall bit guidance QX. QX where couple consumption think then non-measured channels, it the the timing full on combined performance which on in do the have reference into of the we we we'll saw year. of land of performance, the where prepared things, scan saw script. out in

scanner continue latest we expect to this through growth and strong We see week.

of balance We see consumption year. retail the strong expect to through

multipack the XX year. good through this way this think instance, flagship quite of XXX milliliter move further the ACV the of limited about the Slide of for natural investor relative you bit this largest Or at wondering growth presentation multipacks? year. offerings, right for quarter, of up revenue for it's I the more What you the steady one expect in item? the was particularly to make and the last I on the core continue I'm been, the are as think, kind improvement or looking do year a to count, those balance multipack because to on you is level portion your XXXX? ACV, quarter than kind I'm of distribution state in and progress then mean, the And

there's the most for think I slide, I lot Well, you have of ACV, in continued that item if think count. at you look places within on that's should that be That distribution the room MULO growth. a see one same

distribution distribution. continue item, to So that to continuing ] item to is [ grow for there's on that opportunity and grow point

there's we So think there. a quite room of bit

in is I squeeze mentioned quickly. to high -- You If strong. some largely obviously the pricing referred for that pricing perspective? a impacts, seasonally also one in could Is more The and a performance margin peak gross that XX% seasonal COGS have normalized. quarter,

on update with of gross So key could margin rate, us longer-term Label particularly the in thinking context that your around business Private you customer? retaining that

Yes.

including a that alluded our Certainly, little sort very some timing XXXX. from efficient modeling very our was to bit. of across of we supply When pricing, think portfolio strong, the quarter we number and about for seasonal of a chain. I talk elements, benefiting pricing

is I where we're high think look XXs of as thinking we we indicated be. sort we'll forward, that

So be and could of QX that issues. think we've those I QX because -- timing below said

yes, our how I a is flowed business reflective the an think little P&L, we happy of I through future of mix. everything with it's think but don't outlier, very think unusual obviously, So it

Congrats. Thanks and

Jon. Thanks,

comes question next Sachs. of Herzog Goldman Bonnie our And from

a question I about your business. had Private Label

with retain and existing this the First, bit comments But I color distribution business. I a notice with agreement about retaining help customers. I more was also, guess, congrats on with business, And little the expanding customer and key this Label new guess. cost an hoping, I but associated this of then for reaching to decision couldn't Private on your

to strategy trying So Private I understand the of this to and with to reconcile magnitude deemphasize Label. trying guess your this

what changed strategy? your with Just maybe understand trying to has

example we Label some margin business picture, scale, we've have and this lose competition may we advantage, we We Private general. mentioned quality. within of an model. may our Private gain we structure supply big think business, in But I Label significant our last over And a most in this reliability, business. works have and that time, it customer, and decision mean, and this mean in to supply the some love time, is like some new business. continued gain I believe We when -- I of think major we new shows may chain chain I

And again, Private like so we Label.

Label. We Private will continue to grow

and new continue example prove business, it is which will has get think work just our And this about. advantage but we on excited believe, bid us to of business supply within model. continuing our chain we're an to We I to

want ask in And about and or branded I a then I growth did to than your guess, I Vita Coco sales It bit water muted decelerate quarter. little was, more expected sales the sequentially.

growth this imply, X% just and around then I growth sales top you're year. year, it So a know for it, I mentioned in guidance is next quarter, little in your shifts. top-line impact growth does hoping peak QX thinking a color for more about but then new an summer this, QX, about And low especially line think, inventory thinking on you talking about single-digit

bit trying maybe slowdown? more level little just understand conservatism? a of why of So Or some to for looking you're a just this is

about Bonnie, So We lots the earlier current pieces. timing. of there's quarter talked moving

the see remain of that next the balance branded the you some of what's the price in balance through expect and Label, scanner year, guidance we we but that to healthy, of have of expect the in we're the into the still As we flows year, that providing of And growth balance do year our In can and to and continue we see growth, year, the continue. also, which scans to very Private mix in strong is we driving into year. next changes. hit believe impact

just is there of be if I may, but pricing an category a will essentially growth, single-digit low expectation So -- slowdown? sales muted, that, context I but in for the of the more expectation assume

year. have were assumption in of we -- perform it a we the a next Private category historically. No, to base with line expecting the price into heading volumetrically expecting has the the in impact And versus branded how in mix Label our of kind then

Morgan Serotta Eric Our Stanley. next question of comes from

business could holding that you took of teens a target you Private to and you give in I with Private customer's that target. also by growing on the changed to long-term from teens, your additional EBITDA Hoping the Last a some because piece. mix Label terms smaller Label impacted expectation mid adjusted up of us your just of Label Private portion very has quarter, now think high business color the would long-term nicely elsewhere? How be been in the that greater margin high

This quarter, teens. it at high like looks you left it

Just wondering below pieces surface? what moving the are the

Yes.

I comfortable still we're think of sort with long-term that outlook.

is and it's a quarter in, a can month, now this obviously, achieve seasonal know, of what example we think I you right outcome possible. it it's month that an peak is that, but shows

believe model we is long-term that So achievable. still

remains pieces, The strong. the other moving very branded business

we're winning, is that think Private and Mike that. the Label reflective are But we winning new Label Label As to, the algorithm. supports still Private business alluded -- we Private business long-term some of big financial of in growth

and give in in C-Store you looks improvement of and modest sequential in the color channel. product And It the expectations you the like could ACV additional innovation some terms had convenience placements channel? store then your more terms little the the of hoping a C-Store performing particularly How getting in a is for But you talk can little shelf in product juice of broadly in bit you space? juice quarter. terms

Yes.

executional we're drive will how produce spending additional We're distribution think marketing sales, support in and the fair it support a amount QX it's with velocities that sort to, discussions. pleased of performing. I of,

for and happy. again, building a go them opportunity that and us. tell nicely, and we it's we good distribution would always Obviously, at to think our growth we're to source like time, this but challenge point long-term faster, So we sales it's guys of in go faster,

Salera And our next Stephens. question Jim comes of from

mentioned back had Because you'll in in line long-term the if on Label the kind key If guys with the quarter, wasn't serve in second targets. me you my Private of notes basically work contract me correct, your long-term dig with customer. margin

margin So expectations that, Or kind line thinking I now any or that color you you was you Or offer can to think, if just that changed? helpful. has in had assume wondering if be back XQ? would the we could on went around your with long-term of provide when them, they just is came the in back I

Yes.

do not Our thinking we're and to question… to answer going has we model, your around changed. To it Private continue If that. fit Label, within believe it has our to business

no, ahead. No, go

your end, that answer work within this both partnership of to model. terms work question. will the us, continue business for In that our No, under

and And customer is I the could of mean, that another When to your offering? to can wasn't consistently. that think about a positive out market, kind XQ trying on deliver happen could on candidly, guys you, Label see supply that to we into pretty to context so to kind the went get around this there to quality this fast of quickly? strength for Private incrementally that just could really that's it's it the consistency obviously from revert, why alternative XQ follow your and maybe that, same you this but some chain of caused what as, mentioned it they you found ability we so turnaround And just deliver

exactly know because the what's does Yes. going always on. Obviously, it's not customer hard to tell you

both that obviously, announced transitioning we water and QX reached subsequently, an relationship. then think in conclude business. the and the with obviously, was the we still that understanding oil I would had And we -- a we're business

in obviously, as important be for QX, terms to went them under our you know what really work. would that and under any conclusion background.What the were, with as support tell portion happy whatever not way here But were concluded and us, to the a that said, we're continuing is obviously, partnership. we're comfortable their plans going don't our on with that, we're the we supply business to work So we can And this exactly can of that us. in we in the is we And models. Mike said to retailer terms they meet

ahead looks And bound it Or that your that was we then if think On broader you look, of can per I more one kind price the should to I the kind year-to-date. dollar the Is sneak you're of terms of, and maintain maybe of coconut relative have upper think ounce to relative category? you if change, like water gap in question. the there percentage category there you guys an pricing in running guys just relative category? of, Slide X, can

relative I category. think position to current our the we like

significant of price. going we're supply categories increases, I we that.We of like rest of ago that today, X chain has if what right? X we have, you Coconut most Water So years look ocean in has the is think affordable freight in of volume our Obviously, that beverage businesses to we're fact monitor taken to in actually beverage and category. the economics increases one the took of the we absent partly because years, in relative perhaps stated, pricing few the over very relative to beverage X the nonalcoholic how to as performed relative growing were more than -- beverage those

that to we're any if fuel So And to gaps. to we'll competitive changes are price to going basis on see going obviously, by what's monitor current continue environment that necessary. on, the the maintaining

Michael Lavery of our comes from And Piper next Sandler. question

Label momentum segment follow-up top catching Coconut bit of branded just Water correctly, the what Coco you're I in wanted line? on look all Private Vita of from on touch like XXXX. I'm it the by how peak you've to thinking about terms you drag Can into Bonnie's question there just us might a thinking is itself a where growth. And mix the the the given little if on strong

to you've is modeling we're high to had years, model think, scan about this, guidance. single Yes. Obviously, coconut trying growth, X the in last We're trying I'd to modeling. not digits. pretty just data, X, which the I category of seen provide I be to what in volume similar think sort water If

single Yes, digits. mid-to-high

some to single plus Obviously, high right? digits share, goals, gain of me tells he when I've asked Mike set got to to grow share. Mid yes, me

think that's So I it. about how would

to feel business, the think in which Obviously, be provides alluded of branded the good data in changes scan channels revenue effectively net obviously is pieces continues as about I about year. in the scan scan channels. need changes for next very We've lots growth. we to strong Label Label there's we as other But very mix Obviously, we've growing. grow a price some the headwind to, here. Private that moving as Private Corey got talked relationship the

signing for. that's So challenge our but challenge a up we're sales that's the for force,

segment And and too to want very, sequentially other just the and doesn't even very was on but but growth small, the turn much, us update year-over-year, over it get numbers to touched the I there can obviously, actually you absolute in tiny robust.

limited Just we how think test. small this? or else segment LIFT maybe on of help what about that Is that us going is moving that the might understand well? could there's if be alone a maybe needle pretty Or going been think test about I how geographically how there? evolve PWR think to do on some

Well, we a main in perspective from water a would into the that that items say priority segment, of to segments. and growth don't I is continue, coconut obviously, prioritize business X What there's variety into other with as and growth as innovation the priority innovation stuff. of obviously Vita secondary the Coco as a that branded related commodities sort -- activities, of efforts other long as fall some fall and well

think it's bit slight reflects little is in volume there growth some So seeing PWR in investments you're noisy.I LIFT. a our what that

it. think very with happy I we're

I think over we sort which LIFT conversations interesting indexes analysts with we our and actually. have believe on PWR the is of based our investors,

we're it we make Obviously, little required that's in out where we -- make it we is the to get something competitive to shelf obviously, to like we're happy cost-effective So can a and retail. to get way we're the look perhaps trying shelf. a influence segment, we there, geographies drive add next to have what's work additional as to it successful, how a because stronger this with to some on distribution to something it's make know hoping progress.And but work year, very at

of that help but pleased are we efforts ready of other -- part doing as a category there some we're portfolio in will I of not our we're with it well. other So we're innovation. that also portfolio talk initiative to but hopefully that have pretty as opportunities, about brand that say as And yet when innovation,

from next comes Chris our question And Carey of Wells Securities. Fargo

follow-up. One quick

that rolling Can you're you just Label, to confirm pricing do but Private branded intend on back I So business. that? the don't on

We've think, just been Private Label. to that effects our we're we Label business. about very don't rolling said affect talk Private careful have I for and back that mix Chris,

I think…

track And been in we've will careful. long-term but COGS, Private Label very

confirm the question, So I fact. a just to as don't want

you general, you feel How to can about overall currently in relative you strong price Yes, certain category to do price levels Just sense. where that feel feel the how and in maintain makes gaps plans about you gaps the consumption do forward? going that see? sit? And any

how about reference talked rest in feel to of relative category of the beverage question. prior sort the we've we So to a already

I Label a our retailers concentrated think in of relative retailer-specific to Private where and few those look situations universe, we obviously in Private right? next retailer as if Label, those Label, trends. sort we'll major to So Private the we U.S., retail-specific.Obviously, brand should shelf the Private the few monitor as sits said, that's to of relative sort are that on their price it we the reduce total retailers suppliers should monitor Label, at with is will --

shelf, the coexist Private believe Label now, nicely on the and they're think I we branded right complementary.

how of to now, retailers, trying branded revenue for next as across we're obviously, Our our value the year as pricing goes sort in on.But I suppose now. are revenue, is looking monitor the revenue pricing, moving portfolio 'XX, take think of, by about to But of I price. to as category brand plans SKUs, we're anchoring we'll And use good. Label, think, it that's to opposed we optimize think most as velocities word something to can't right I is what optimization ascribes Private sort well thinking about as the

to that said atypically QX remain margin probably high. will just gross One that final I'm know trying follow-up. pricing I understand because comment seems you remain. the was to cost relief

in and key What sequentially gets worse mix into into next year? QX? QX the difference is So

bit mix the drove seasonally, COGS. price of little inventory Vita Coco of of efficiency kind a quarter supply low, water And Water Coconut the the is was of as the absolute there's higher. in price, coconut the Yes, advantaged then chain

a with that, Label Private is quarter high. what So combined on makes different seasonally the mix price

from our Des question comes Capital And Lauriers of next Group. Craig-Hallum Eric

here. quarter Congrats on another strong

this the share is quarter. less update With versus in last, you flow, helped indication point? us months? sort So opportunities cash I'm a beyond X, that profitability perhaps wondering, a XX that give more big attractive Presumably at Maybe of if of obviously, just opportunity call categories repurchase authorization. just coconut an this And this see on lead the and M&A so to it, over take build water? share should an buy repurchase, the gotten maybe as standout this the have we that

Yes.

is sort optionality authorization, primarily buyback about be and think creating wouldn't Obviously, of the authorization an way I I the without use for would company, basically the think buyback option. a flexibility cash. of, in its that

make capital.The cash There the in we've to do. for at for months possible support their are but I at interesting we that as nothing options certainly on But we or continues, that option something we've look think, of think currently opportunities. was being makes of all and to about. there situation. next are specific become some valuations wanted sense believe model use for other M&A the capital previously change. certainly as what's inventory is end inventory indicated, use over our build. rights, available talked the one due could the cash depend explore of They're whether of things obviously XX sense that and own I there that imminent, if to them. they Part fit And sort the and could we, obviously, the a obviously, obviously, of out buyback But needs it's environment, look our quarter said, low healthy. to balance at as a is is We going the very quarter.And little is

then the sitting gives to it we the it us.If this think creates we I approved back be in some you balances take the aspect M&A, So you us on yesterday. said flexibility you just would probably of as coming us for again, out And this, no cash release, buyback are optionality. assume was the why I So and think project? models asking

And so in obviously, do. of what early process to deciding the we're

marketing And question spend. last is then for me on

spend a the that saw And cocktail so bars. we be new that far number driving you examples where that But a seems certainly being incremental been sense. of over color It to time, into might same occasions, pop-up the some there occasion those you're makes summer, more Can of are me marketing of us winter at on So increasing just seasonality used new months. obviously much spend kind used that various on the of dollars and spent? has in marketing driving partnerships the spend. bit give

those. of think highlighted I a you number

increase opportunity during announced we that And us. to our also quarter, think is for a great brand core opportunity that's G the long-term for Becky a I think among us, our the demographic we relationship. saliency

seasonality that of timing spend the the most affecting QX. timing I QX has the takes of is would delayed, be and little driven do little it a marketing year, acknowledge put relationship to business some some so Becky our got that it, QX, in typically of QX.But And obviously, think with a the G, time to a this bit bit of together. I that like relationship we

this some years in have the catch year. that on sales perhaps Plus, pulled off on, and is back this have doing prior of that we've terms we're that timing some of And we so year. distribution up we driving execution amplified

to you might see is abnormal going year little a forward. this what So

Our from Spillane of Bryan comes of Bank America. question next

we in million, you'd now, August? adding in where the midpoint have at looking the underlying terms I related not. of Like at the think 'XX question one $XX at thought or adding of 'XX just or we 'XX, changed 'XX now way too you're versus on back back And kind given you're I -- 'XX I 'XX. at point at are way we guess we're commentary much then in color $XX you the just were? we I not go you've is, million originally to else to anything talked lose? business where least my -- -- I was entirely the it's think 'XX about to -- look the just the if we versus the ranges, took I'm anyway, back has sure revenue I think you looking back as that But of when And about but

Yes.

Private we that's Certainly, that more the we we branded that both category growing share in the difference. can of, think the piece So are in side. the of still we the category.And terms on agreeable branded under, adding Label is with healthy. the I think I the We is it of investments we're business business back that growing sort us, thought business, category, were the Private think to right? like we a reasons losing one of fund the and additional have Label and

not might return North business category in certainly business. the back the adding margin -- have how America, of Accretive the because we when be is just view the we we So it higher have accretive. we of purely the just sort investments view to grow more

Yes.

in our going right, everything to So simplistically, at in out, like what washed -- of, August? model the retain, for we're in had where were 'XX terms and if that now models, you we're just revenue it seems is relative to again, most everything back looking you're portion expectations doing else really adding that

next August, a go, let's bit now the based okay, have what people we on said say we're assume trying little significant based on in next where hit we perhaps that's were with year, would whereas can squeezed probably not including supporting way we with, that while our But guidance very it. think to I Again, Yes. an SG&A that up go. came don't about provide think modeling, own, to hard So year everyone's right? I would for unreasonable we

last one And then follow-up. just

space with additional Michael for In remember about logic more benefit space those the business customers, and Private customers? more Private allocate in like shelf part up having a retained some won sort about I them Label to Label Costco, category. it of for that terms having does or the business to shelf the -- of of previously talking merchandising open of door the encourages

if space to curious -- forward, open just the I'm actually So more door the it category? to look have dedicated as does we

Yes.

lot think parts world, more several where of Europe, like not more it to I talked the to think we're this Label before, have about us mentioned, business. and have you Western specifically, a just in winning allow category in -- only But does allow we space. or I of the Private

front starting to build benefit retailers these build the the Private the about in then and real Label, next have to, of is obviously, Coco which category, building long-term a getting and Coco in with brand items only the not branded and globally. out the the we Vita also the brand together benefit to having but category Vita now Private as bringing the category branded, maybe We and of conversations Label --

turn showing now Martin to CEO, like questions Roper, at time. remarks. it the for to this I'm closing back further I would no

your the of we of we hosting and meeting. you February forward has year. Thanks, Didi, next to sort and talking year Halloween. look when we or again during everybody, Thanks, for have interest, March to a great appreciate full everyone Hope results

call. for participating, conference now disconnect. Thank you today's you may concludes and This