- Completes Voluntary $42 Million Term Debt Paydown and Delays
Principal Payments Until January 2026
- Fourth Consecutive Quarter of Positive Adjusted
EBITDA
- Second Quarter 2024 Positive Cash Flow of $1.0M
- Announces Revised FY24 Guidance
Grove Collaborative Holdings, Inc. (NYSE: GROV) (“Grove” or “the
Company”), the world’s first plastic neutral retailer, a leading
sustainable consumer products company, certified B Corporation, and
Public Benefit Corporation, today reported financial results for
its fiscal second quarter ended June 30, 2024.
“Today’s update marks nearly my first full year as CEO and I am
proud of our progress on delivering Adjusted EBITDA profitability,
strengthening our balance sheet, stabilizing revenue, and
leveraging sustainability as our point of differentiation. We have
delivered positive-adjusted EBITDA in four consecutive quarters,
positive operating cash flow in three of the last five quarters,
and, subsequent to the end of the second quarter, paid down $42
million of term debt to strengthen our balance sheet and reduce
interest expense. We are also forecasting sequential revenue growth
in the fourth quarter of this year after reshaping our business
amidst a major turnaround,” said Jeff Yurcisin, Chief Executive
Officer of Grove Collaborative. “Furthermore, over these past
twelve months, we have rebuilt our ecommerce customer experience,
which we expect will lead to sustained growth in the future.”
Second Quarter 2024 Financial
Results
Revenue was $52.1 million, down 2.7% from the first
quarter of 2024, and down 21.2% year-over-year resulting from a
decline in orders, partially offset by an increase in Net Revenue
per Order. Grove is starting to see revenue from its repeat
customers stabilize, resulting in a smaller sequential revenue
decline than the prior quarter. The strength of the Company’s core
customer base is one of its most valuable assets and is a
significant factor in the Company’s confidence that it will be able
to deliver sequential growth in the fourth quarter of 2024. Since
the beginning of its business model transformation, the Company has
been disciplined in its deployment of advertising dollars,
prioritizing efficiency to ensure spend has the right cost of
acquisition and payback period. The Company plans to increase
advertising spend in the fourth quarter of this year to the extent
acquisition costs and payback periods warrant the additional
investment.
Gross Margin was 53.9%, a decrease of 170 basis points
from the first quarter of 2024, but an increase of 200 basis points
year-over-year. The sequential decline was mostly driven by a
decrease in recognized third party vendor allowances due to an
accounting true-up in the first quarter of 2024, the
discontinuation of certain customer fees, and an increase in
discounts. Absent the accounting adjustment, third party vendor
allowances increased in the second quarter compared to the first
quarter as the Company onboarded more vendors to its subscribe and
save program. The year-over-year improvement in gross margin was
mostly due to the sell-through of previously reserved for
inventory, lower discounts from a decrease in first order volume,
and an increase in vendor allowances, offset by a decrease in Grove
Brands % of Net Revenue.
Operating Expenses were $35.0 million, an increase of
15.6% from the first quarter of 2024 but down 20.2% year-over-year.
The sequential increase is mostly driven by the $2.9 million gain
from restructuring recorded in the first quarter that did not
recur, compounded by a $2.2 million restructuring charge in the
second quarter. The year-over-year improvement is primarily driven
by lower fulfillment costs from fewer orders, lower personnel,
facility and professional expenses, and lower advertising
expense.
Net Loss was $10.1 million, (19.3%) margin, compared to
$3.4 million, (6.3%) margin in the first quarter of 2024, and $10.9
million, (16.4%) margin, in the second quarter of 2023. Net loss
increased in the second quarter compared to the first quarter
primarily due to the $5.1 million adverse movement in the
restructuring line from the first to in the second quarter.
Adjusted EBITDA1 was positive $1.1 million, 2.0% margin,
compared to positive $1.9 million, 3.5% margin, in the first
quarter of 2024, and negative $2.6 million, (3.9%) margin, in the
second quarter of 2023.
Cash, Cash equivalents, and Restricted Cash was $82.6
million at the end of the second quarter of 2024, an increase of
$1.0 million from the first quarter of 2024, primarily driven by a
reduction in working capital partially offset by net interest
expense. After quarter end, Grove completed a $42 million paydown
of its term debt.
Second Quarter 2024 Key Business
Highlights:
Three months ended
(in thousands, except DTC Net Revenue Per
Order and percentages)
June 30, 2023
March 31, 2024
June 30, 2024
Financial and Operating Data
Grove Brands % Net Revenue
45
%
43
%
41
%
DTC Total Orders
974
773
732
DTC Active Customers
1,133
807
745
DTC Net Revenue Per Order
$
65
$
66
$
68
Grove Brands % of Net Revenue was 41.1% in the second
quarter of 2024, down 190 basis points quarter-over-quarter and 390
basis points year-over-year. The sequential and year-over-year
declines were largely due to the expansion of the Company’s third
party product offering and the recent transformation of the
customer experience on the Company’s ecommerce platform, which no
longer utilizes recommended baskets in first orders that included a
higher percentage of Grove Branded products.
Direct to Consumer (DTC) Total Orders totaled 0.7
million, down 5.4%, quarter-over-quarter and 24.9% year-over-year.
The year-over-year and sequential declines continued to be impacted
by lower advertising spend, with sequential declines slowing as
historical cohorts stabilize.
DTC Active Customers, the number of customers that have
placed an order in the trailing twelve months ended June 30, 2024
totaled 0.7 million, down 7.8% compared to the first quarter and
34.3% compared to the second quarter of 2023. Similarly, the
year-over-year and sequential declines were due to lower
advertising spend.
DTC Net Revenue Per Order was $67.73 in the second
quarter of 2024, an improvement of 2.2% compared to the first
quarter of 2024 and 4.5% compared to the second quarter of 2023.
The sequential and year over year improvements are due to an
increase in units per order and sales of higher priced products,
including Vitamins, Minerals, and Supplements, partially offset by
the discontinuation of certain fees the Company charged
customers.
Second Quarter 2024 Operational
Highlights
Amidst Grove’s turnaround, the Company has refocused its
priorities to be (1) Profitability and (2) Balance sheet strength,
the foundational elements of financial stability, (3) Stabilizing
Revenue, and ultimately delivering Revenue Growth, which will
create long-term shareholder value, and (4) Sustainability, Grove’s
point of differentiation and reason for being.
Key operational highlights related to the Company’s refocused
strategic pillars in the second quarter include:
- Profitability:
- Positive Adjusted EBITDA and Cash Flow: Delivered $1.1
million of Adjusted EBITDA, the fourth consecutive positive
quarter, and $1.0 million of positive cash flow as the Company
continues to prioritize profitability, improve its cost structure
and optimize working capital. The Company has also delivered
positive operating cash flow three out of the last five
quarters.
- Continued Improvement of Operating Costs: Pursued
additional initiatives, including vendor and contract negotiations,
to increase operating leverage and improve profitability.
Specifically, the Company signed a lease in a new location for its
fulfillment center operations in Reno, NV, avoiding a significant
rent increase, and fully ceased operations in its fulfillment
center in St. Peters, MO.
- Balance Sheet:
- Debt Paydown: Subsequent to the end of the quarter,
Grove repaid $42M of term debt and delayed its term debt principal
payments until January 2026. More specific details can be found in
the Current Report on Form 8-K filed by the Company on July 19,
2024.2
- Revenue Growth:
- Third Party Category and Selection Expansion: Grove
continues to offer more planet-first brands and products that are
relevant to the conscientious consumer, increasing the number of
third party brands sold by 12% in the second quarter of 2024
compared to the second quarter of 2023. A sample of new brands
welcomed to the collaborative this quarter include: Nellie’s,
Freestyle World, Fresh Wave, Caboo, and Koala Eco. Grove also
continues to expand its subscribe and save program, with 63% of all
products now available for customers to subscribe to at a
discounted rate, providing customers an incentive to build larger
planet- and wallet-friendly boxes.
- Shopify Transition: Grove today announced that it will
replatform its custom direct to consumer website to Shopify
technology as part of the Company’s ongoing transformation, meant
to create opportunities for new customer enhancements, drive down
costs for ongoing site maintenance, and better leverage industry
best practices and innovations for future growth. The transition
began in July 2024 and is expected to be completed in the first
quarter of 2025.
- Sustainability:
- B Corporation Recertification: Grove launched its fifth
annual sustainability report in May 2024, providing comprehensive
reporting on key company commitments, progress, and partnerships.
The Company also announced its B Corp recertification with a score
of 100.9 points3, significantly higher than its 2020
recertification of 80.3 points, joining the 5% of companies that
have maintained B Corp certification for more than ten years.
- Plastic Intensity4: Plastic intensity across the entire
Grove business (across all online and retail sales) was 1.02 pounds
of plastic per $100 in net revenue in the second quarter of 2024,
down from 1.08 pounds in the first quarter of 2024 and down from
1.11 pounds in the second quarter of 2023.
Financial Outlook:
Chief Financial Officer Sergio Cervantes commented, “We are in
the middle of transforming our business model and improving the
customer experience. But at the same time, we are strengthening our
balance sheet, maintaining strict expense and investment
discipline, and starting to see revenue from repeat customers
stabilize, resulting in smaller sequential revenue declines. We are
optimistic that our strategy will allow us to increase advertising
and drive sequential growth in the fourth quarter and beyond, as we
grow off a stabilized core revenue base. This transformation has
taken longer than anticipated at the beginning of the year and
therefore we are lowering our revenue guidance to reflect this.
However, we are increasing our Adjusted EBITDA margin guidance as
we continue to identify additional savings throughout the
business.”
The Company is announcing the following revised guidance for the
full fiscal year 2024:
- Net revenue of $205 to $215 million, a decrease from $215M to
$225M
- Adjusted EBITDA margin of 0.5% to 1.5%, an increase from 0% to
1.0%
Conference Call
Information:
The Company will host an investor conference call and webcast to
review these financial results at 5:00pm ET / 2:00pm PT on August
8, 2024. The webcast can be accessed at
https://investors.grove.co/. The conference call can be accessed by
calling 877-413-7205. International callers may dial 201-689-8537.
A replay of the call will be available until September 7, 2024 and
can be accessed by dialing 877-660-6853 or 201-612-7415, access
code: 13748176. The webcast will remain available on the Company’s
investor relations website for 6 months following the webcast.
About Grove Collaborative Holdings,
Inc.
Grove Collaborative Holdings, Inc. (NYSE: GROV) is the one-stop
online destination for sustainable everyday essentials. Driven by
the belief that changing the world starts with what you bring into
your home, Grove creates and curates household cleaning, personal
care, health and wellness, laundry, clean beauty, baby, and pet
care products from over 240 brands that help you Go Beyond Plastic.
Everything Grove sells meets a higher standard — from ingredients
to performance to packaging and environmental impact — so you get a
great value without compromising your values. With Grove, you can
see, track, and celebrate your sustainable choices. Be a force of
nature at Grove.com.
__________________________________
1
Adjusted EBITDA and Adjusted EBITDA margin
are non-GAAP financial measures. See “Non-GAAP Financial Measures”
for a description of Adjusted EBITDA and Adjusted EBITDA margin and
a reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to
net loss and net loss margin in the table at the end of this press
release.
2
https://www.sec.gov/ix?doc=/Archives/edgar/data/1841761/000162828024032249/grov-20240716.htm
3
https://www.bcorporation.net/en-us/find-a-b-corp/company/grove-collaborative/
4
Grove defines plastic intensity as pounds
of plastic used per $100 in revenue as a way to hold itself
accountable for the pace at which it decouples revenue from the use
of plastic. To calculate plastic intensity, Grove Collaborative
defines "plastic" as any of the following materials within both
products and packaging: plastic resin codes #1-7 (from the ASTM
International Resin Identification Coding System), inclusive of
polyvinyl alcohol (PVA, PVOH, PVAl), silicone, bioplastics, and any
plastic liners, coatings, and resins.
Forward-Looking
Statements
This press release contains "forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to, statements
regarding Grove’s core initiatives reshaping their business,
sequential growth in the fourth quarter and beyond, the rebuilt
ecommerce customer experience leading to future sustained growth,
an increase in advertising spend in the fourth quarter, completion
of the replatform to Shopify in the first quarter 2025 and Grove’s
2024 guidance for Net revenue and Adjusted EBITDA margin. Any
statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. The
forward-looking statements contained in this press release are
based on Grove’s current expectations and beliefs in light of the
Company’s experience and perception of historical trends, current
conditions and expected future developments and their potential
effects on the Company as well as other factors believed to be
appropriate under the circumstances. There can be no assurance that
future developments affecting the Company will be those that have
been anticipated. These forward-looking statements involve a number
of risks, uncertainties (some of which are beyond the Company’s
control) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by these forward-looking statements, including changes in
business, market, financial, political and legal conditions; legal
and regulatory matters and developments; risks relating to the
uncertainty of the projected financial information; Grove’s ability
to successfully expand their business; competition; the uncertain
effects of the COVID-19 pandemic; risks relating to inflation and
interest rates; effectiveness of the Company’s ecommerce platform
and selling efforts; demand for Grove products and other brands
that sold and those factors discussed in documents filed, or to be
filed, with the U.S. Securities and Exchange Commission. Should one
or more of these risks or uncertainties materialize, or should any
assumptions prove incorrect, actual results may vary in material
respects from those projected in these forward-looking statements.
All forward-looking statements in this press release are made as of
the date hereof, based on information available to Grove as of the
date hereof, and Grove assumes no obligation to update any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
Non-GAAP Financial
Measures
Some of the financial information and data contained in this
press release, such as Adjusted EBITDA and Adjusted EBITDA margin,
have not been prepared in accordance with United States generally
accepted accounting principles (“GAAP”). These non-GAAP financial
measures, and other measures that are calculated using such
non-GAAP measures, are an addition to, and not a substitute for or
superior to, measures of financial performance prepared in
accordance with GAAP and should not be considered as an alternative
to revenue, operating income, profit before tax, net income or any
other performance measures derived in accordance with GAAP.
Investors should not consider them in isolation from, or as a
substitute for, GAAP measures. A reconciliation of historical
Adjusted EBITDA to Net Income is provided in the tables at the end
of this press release. The reconciliation of projected Adjusted
EBITDA and projected Adjusted EBITDA Margin to the closest
corresponding GAAP measure is not available without unreasonable
effort on a forward-looking basis due to the high variability,
complexity, and low visibility with respect to the charges excluded
from these non-GAAP measures, such as the impact of depreciation
and amortization of fixed assets, amortization of internal use
software, the effects of net interest expense (income), other
expense (income), and non-cash stock based compensation expense.
Grove believes these non-GAAP measures of financial results,
including on a forward-looking basis, provide useful information to
management and investors regarding certain financial and business
trends relating to Grove’s financial condition and results of
operations. Grove’s management uses these non-GAAP measures for
trend analyses and for budgeting and planning purposes. Grove
believes that the use of these non-GAAP financial measures provides
an additional tool for investors to use in evaluating projected
operating results and trends in and in comparing Grove’s financial
measures with other similar companies, many of which present
similar non-GAAP financial measures to investors. Management of
Grove does not consider these non-GAAP measures in isolation or as
an alternative to financial measures determined in accordance with
GAAP. There are a number of limitations related to the use of these
non-GAAP measures and their nearest GAAP equivalents. Other
companies may calculate non-GAAP measures differently, or may use
other measures to calculate their financial performance, and
therefore Grove’s non-GAAP measures may not be directly comparable
to similarly titled measures of other companies.
Grove calculates Adjusted EBITDA as net income (loss), adjusted
to exclude: stock-based compensation expense; depreciation and
amortization; changes in fair values of derivative liabilities;
transaction costs allocated to derivative liabilities upon closing
of the transaction where Grove became a publicly traded company;
interest income; interest expense; restructuring and severance
related costs; provision for income taxes and certain litigation
and legal settlement expenses. Grove defines Adjusted EBITDA Margin
as Adjusted EBITDA divided by net revenue. Because Adjusted EBITDA
excludes these elements that are otherwise included in the
Company’s GAAP financial results, this measure has limitations when
compared to net loss determined in accordance with GAAP. Further,
Adjusted EBITDA is not necessarily comparable to similarly titled
measures used by other companies. For these reasons, investors
should not consider Adjusted EBITDA in isolation from, or as a
substitute for, net loss determined in accordance with GAAP.
Grove Collaborative Holdings,
Inc.
Consolidated Balance
Sheets
(In thousands, except per
share amounts)
June 30, 2024
December 31,
2023
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
78,807
$
86,411
Restricted cash
3,325
5,650
Inventory, net
27,842
28,776
Prepaid expenses and other current
assets
3,352
3,359
Total current assets
113,326
124,196
Restricted cash
502
2,802
Property and equipment, net
7,995
11,625
Operating lease right-of-use assets
7,744
9,612
Other long-term assets
2,208
2,507
Total assets
$
131,775
$
150,742
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
9,251
$
8,074
Accrued expenses
11,322
16,020
Deferred revenue
6,886
7,154
Operating lease liabilities, current
1,551
3,489
Other current liabilities
221
306
Total current liabilities
29,231
35,043
Debt, noncurrent
73,404
71,662
Operating lease liabilities,
noncurrent
7,149
14,404
Derivative liabilities
11,305
11,511
Total liabilities
121,089
132,620
Commitments and contingencies (Note 6)
Redeemable convertible preferred stock —
$0.0001 par value
10,000
10,000
Stockholders’ equity:
Common stock — $0.0001 par value
4
4
Additional paid-in capital
635,224
629,208
Accumulated deficit
(634,542
)
(621,090
)
Total stockholders’ equity
686
8,122
Total liabilities, redeemable convertible
preferred stock and stockholders’ equity
$
131,775
$
150,742
Grove Collaborative Holdings,
Inc.
Consolidated Statements of
Operations
(Unaudited)
(In thousands, except share
and per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenue, net
$
52,099
$
66,106
$
105,644
$
137,671
Cost of goods sold
24,036
31,798
47,841
66,108
Gross profit
28,063
34,308
57,803
71,563
Operating expenses:
Advertising
2,439
4,657
4,492
13,330
Product development
5,436
4,052
9,062
8,268
Selling, general and administrative
27,124
35,159
51,718
73,180
Operating loss
(6,936
)
(9,560
)
(7,469
)
(23,215
)
Non-operating expenses:
Interest expense
4,117
4,044
8,246
7,773
Changes in fair value of derivative
liabilities
(8
)
(1,727
)
Other income, net
(994
)
(1,021
)
(2,077
)
(5,638
)
Total non-operating expenses (income),
net
3,115
1,296
5,963
700
Loss before provision for income taxes
(10,051
)
(10,856
)
(13,432
)
(23,915
)
Provision for income taxes
10
11
20
21
Net loss
$
(10,061
)
$
(10,867
)
$
(13,452
)
$
(23,936
)
Less: Accumulated dividends on redeemable
convertible preferred stock
(150
)
—
(300
)
—
Net loss attributable to common
stockholders, basic and diluted
$
(10,211
)
$
(10,867
)
$
(13,752
)
$
(23,936
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.28
)
$
(0.32
)
$
(0.38
)
$
(0.70
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
36,768,249
34,280,844
36,517,787
34,015,827
Grove Collaborative Holdings,
Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
(In thousands)
Six Months Ended June
30,
2024
2023
Cash Flows from Operating
Activities
Net loss
$
(13,452
)
$
(23,936
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Gain on lease modification
(3,139
)
—
Stock-based compensation expense
6,510
9,841
Depreciation and amortization
4,627
2,897
Changes in fair value of derivative
liabilities
(206
)
(1,435
)
Reduction of transaction costs allocated
to derivative liabilities upon Business Combination
—
(3,745
)
Non-cash interest expense
1,922
1,911
Inventory reserve
(1,216
)
1,228
Other non-cash expenses
—
95
Changes in operating assets and
liabilities:
Inventory
2,150
8,355
Prepaids and other assets
99
716
Accounts payable
1,175
(34
)
Accrued expenses
(4,700
)
812
Deferred revenue
(268
)
(1,890
)
Operating lease right-of-use assets and
liabilities
(4,886
)
(507
)
Other liabilities
(85
)
120
Net cash used in operating
activities
(10,769
)
(5,572
)
Cash Flows from Investing
Activities
Purchase of property and equipment
(906
)
(1,539
)
Net cash used in investing
activities
(906
)
(1,539
)
Cash Flows from Financing
Activities
Payment of transaction costs related to
the Business Combination
—
(4,150
)
Proceeds from issuance of debt
—
7,500
Payment of debt issuance costs
—
(925
)
Repayment of debt
—
(575
)
Payments related to stock-based award
activities, net
(789
)
(1,201
)
Proceeds from issuance under employee
stock purchase plan
235
213
Payment in lieu of fractional shares in
connection with reverse split
—
(1
)
Net cash (used in) provided by
financing activities
(554
)
861
Net decrease in cash, cash equivalents and
restricted cash
(12,229
)
(6,250
)
Cash, cash equivalents and restricted cash
at beginning of period
94,863
95,985
Cash, cash equivalents and restricted cash
at end of period
$
82,634
$
89,735
Grove Collaborative Holdings,
Inc.
Non-GAAP Financial
Measures
(Unaudited)
(In thousands, except
percentages)
Three Months Ended June
30,
Six Months Ended June
30,
Reconciliation of Net Loss to Adjusted
EBITDA
Net loss
$
(10,061
)
(10,867
)
$
(13,452
)
(23,936
)
Stock-based compensation
3,397
4,948
$
6,510
9,841
Depreciation and amortization
2,426
1,449
$
4,627
2,897
Changes in fair value of derivative
liabilities
(8
)
(1,727
)
$
(206
)
(1,435
)
Reduction of transaction costs allocated
to derivative liabilities upon Business Combination
—
—
$
—
(3,745
)
Interest income
(993
)
(1,021
)
(2,079
)
(1,445
)
Interest expense
4,117
4,044
8,246
7,773
Restructuring and severance related
costs(1)
2,170
553
(715
)
553
Provision for income taxes
10
11
20
21
Total Adjusted EBITDA
$
1,058
$
(2,610
)
$
2,951
$
(9,476
)
Net loss margin
(19.3
)%
(16.4
)%
(12.7
)%
(17.4
)%
Adjusted EBITDA margin (loss)
2.0
%
(3.9
)%
2.8
%
(6.9
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808504609/en/
Investor Relations Contact
ir@grove.co
Media Relations Contact
Ryan.Zimmerman@grove.co
Grove Collaborative (NYSE:GROV)
과거 데이터 주식 차트
부터 10월(10) 2024 으로 11월(11) 2024
Grove Collaborative (NYSE:GROV)
과거 데이터 주식 차트
부터 11월(11) 2023 으로 11월(11) 2024
