- First Quarter 2024 Adjusted EBITDA of $1.9 million, Adjusted
EBITDA margin of 3.5%
- Launched Grove Co. rebrand alongside new Ready-to-Use Hand
Soap, Dish Soap and Liquid Laundry Detergent
- Completed headquarters lease restructuring; more than $5M of
cash savings through May 2027
- Maintains full year 2024 Revenue and Adjusted EBITDA
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 first quarter ended March 31, 2024.
Grove Collaborative’s first quarter 2024 financial results
include several milestones for the Company, including its third
consecutive quarter of positive Adjusted EBITDA, demonstrating
continued progress on overall profitability while laying the
groundwork for the business transformation to drive top line
growth.
“This quarter’s results show the early benefits of our continued
focus on profitability alongside our focus on being the trusted
brand for conscientious customers who are seeking high-performing,
planet-friendly products. But I want to emphasize this is just the
beginning of our transformation,” said Jeff Yurcisin, Chief
Executive Officer. “In my first nine months, we’ve made a number of
strategic changes to our business to build a stronger foundation
for long term profitability and growth so that we are better able
to support our customers’ individual sustainability journeys and
transform the industry into a force for human and environmental
health.”
First Quarter 2024 Financial
Results
Revenue, Net was $53.5 million, down 10.5% from the
fourth quarter of 2023, and down 25.2% year-over-year. The
sequential and year-over-year declines continue to be driven by a
decrease in Direct to Consumer (“DTC”)1 orders resulting from lower
advertising spend throughout 2023 and the first quarter of 2024.
The Company spent a record low on advertising as a percentage of
revenue in the first quarter of 2024 as it prioritizes marketing
efficiency and focuses on transforming its business model. The
year-over-year reduction in orders was partially offset by an
increase in Net Revenue per order.
Gross Margin was 55.5%, improving 110 basis points from
the fourth quarter of 2023 and 350 basis points year-over-year. The
sequential improvement was mostly due to an increase in estimate to
Grove’s vendor funding allowance to better reflect the sell-through
of third party inventory. The year-over-year improvement was
further benefited by the sell-through of previously reserved-for
inventory and a decrease in discounts resulting from fewer first
orders, which are more heavily discounted on average.
Operating Expenses were $30.3 million, down 25.3% from
the fourth quarter of 2023 and down 40.5% year-over-year. The
sequential and year-over-year declines are primarily driven by
lower fulfillment costs from fewer orders, lower personnel and
facility expenses, and lower advertising. First quarter 2024
operating expenses include a $2.9 million gain from restructuring,
primarily the modification of the Company’s headquarters lease,
compared to the fourth quarter of 2023 which included a $3.3
million expense from restructuring.
Net Loss was $3.4 million, (6.3%) margin, compared to
$9.5 million, (15.8%) margin in the fourth quarter of 2023, and
$13.1 million, (18.3%) margin in the first quarter of 2023.
Adjusted EBITDA2 was positive $1.9 million, 3.5% margin,
compared to positive $0.1 million, 0.2% margin in the fourth
quarter of 2023, and negative $6.9 million, (9.6%) margin in the
first quarter of 2023.
Cash, Cash equivalents, and Restricted Cash was $81.6
million at the end of the first quarter of 2024, a decrease of
$13.3 million from the fourth quarter of 2023, primarily driven by
a $4.8 million payment in connection with the modification of the
Company’s headquarters lease, the Company’s annual incentive
compensation payout, and interest expense. The Company remains
focused on its use of cash and targets efficient returns on cash
outflows, such as the lease termination payment, which has less
than a two year payback.
First Quarter 2024 Key Business
Highlights:
Three Months Ended March
31,
(in thousands, except DTC Net Revenue Per
Order and percentages)
2024
2023
Financial and Operating Data
Grove Brands % Net Revenue
43
%
49
%
DTC Total Orders
773
1,097
DTC Active Customers
807
1,241
DTC Net Revenue Per Order
$
66
$
62
Grove Brands % of Net Revenue was 43.0% in the first
quarter of 2024, down 150 basis points quarter-over-quarter and 580
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, especially as it relates to the Health and
Wellness category, fewer first orders, which have more Grove
branded items on average, and the Company’s recent transformation
of the customer experience on its ecommerce platform.
Direct to Consumer (DTC) Total Orders totaled 0.8
million, down 10.5%, quarter-over-quarter and 29.5% year-over-year.
The year-over-year and sequential declines resulted from lower
advertising spend.
DTC Active Customers, the number of customers that have
placed an order in the trailing twelve months, totaled 0.8 million,
down 12.3% quarter-over-quarter and 35.0% year-over-year.
Similarly, the year-over-year and sequential declines were due to
lower advertising spend.
DTC Net Revenue Per Order was $66.27 in the first quarter
of 2024, down 0.8% quarter-over-quarter, but up 7.5%
year-over-year. The year-over-year improvement was due to a mix
shift towards existing customer orders (as opposed to first orders)
as well as an increase in the number of units per existing customer
order as the Company expanded its product offering.
First Quarter 2024 Operational
Highlights
Key operational highlights related to the Company’s strategic
pillars:
- Customers: Highlights related to customer priorities
include:
- Growth Model and Experience Updates: The Company began
rebuilding the front end of its ecommerce platform by removing
default subscriptions, eliminating gated email access, and creating
a program for customers to subscribe and save when purchasing
individual products. The launch of the new customer experience in
February 2024 initially led to a reduction in new customer
conversion, but has subsequently improved as the new customer
experience has been optimized. As first order conversion, repeat
order rates, and paybacks improve, the Company plans to spend more
on advertising.
- Third Party Category and Selection Expansion: The number
of third party products offered by the Company increased 34%
year-over-year. Customers have received the Company’s increased
offering of health & wellness products positively, and as a
result, the Company plans to curate planet-first products relevant
to the conscientious customer.
- Grove Co. Product Innovation: The company executed a
Grove Co. rebrand leveraging sustainable aluminum packaging and
launched a ready-to-use assortment of Grove Co. Hand Soap, Dish
Soap, and Liquid Laundry Detergent to offer more accessible entry
points that don’t require the purchase of a durable dispenser.
Other new products included Rooted Beauty by Grove Co. Facial Wipes
and new fragrances throughout the portfolio including Sunshower,
Fresh Pomelo, Wild Mint, and Sea Spray. On May 1, the Company
launched its Summer Limited Edition Collection with The Nature
Conservancy to celebrate Grove’s ongoing partnership with The
Nature Conservancy and the partnership’s conservation efforts in
the Tongas rainforest region.
- Sustainability: Highlights related to sustainability
priorities include:
- Plastic Intensity3: Plastic intensity across the entire
Grove business (across all online and retail sales) was 1.08 pounds
of plastic per $100 in net revenue in the first quarter of 2024,
roughly flat to 1.07 pounds in the fourth quarter of 2023, but down
from 1.12 pounds in the first quarter of 2023. More details on
Grove’s plastic intensity can be found in the Company’s
sustainability report, which the Company plans to publish in the
second half of May 2024.
- Earth Month Celebration: For Earth month 2024 throughout
April, the Company announced key sustainability program updates and
Grove Co. innovation updates. Among these efforts, the Company
began using paper tape packaging to further reduce plastic usage,
launched a digital campaign titled “Perfect Isn’t Sustainable,
Progress Is,” and celebrated core partners, including rePurpose
Global, 5 Gyres, and The Nature Conservancy.
- Profitability: Highlights related to profitability
priorities include:
- Continued Improvement of Operating Costs: Executed
initiatives, including vendor, partner, and contract negotiations,
to increase operating leverage and improve profitability. The
Company also finalized a new, reduced lease for its San Francisco
Headquarters space, and announced the forthcoming closure of its
fulfillment center in St. Peters, MO by the end of May to
streamline operations and improve overall fulfillment
efficiency.
Financial Outlook:
Chief Financial Officer Sergio Cervantes commented, “I continue
to be pleased with our ability to manage our cost structure and
working capital, resulting in our most profitable quarter to date,
despite revenue declining in the first quarter. As a result of the
first order experience changes during the quarter, we are already
seeing improvements in our first order conversion rate, after an
initial decline, increasing our ability to efficiently acquire new
customers, which gives us confidence in our longer term strategy.
Despite the uncertainty around the business model transformation
and our ability to increase advertising spend over the course of
the year, we continue to be optimistic that we will drive
sequential revenue growth in the second half of the year and
deliver positive Adjusted EBITDA for the full year. I look forward
to sharing updates on our business transformation in future
quarters.”
Despite the uncertainty noted above, the Company is maintaining
the following guidance for the full fiscal year 2024:
- Net revenue of $215 to $225 million, and
- Adjusted EBITDA margin of 0.0% 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 May 14,
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 May 28, 2024 and can be accessed by dialing
877-660-6853 or 201-612-7415, access code: 13746066. The webcast
will remain available on the Company’s investor relations website
for 6 months following the webcast.
About Grove Collaborative Holdings,
Inc.
Launched in 2016 as a Certified B Corp, Grove Collaborative
Holdings, Inc. (NYSE: GROV) is transforming consumer products into
a positive force for human and environmental good. Driven by the
belief that sustainability is the only future, Grove creates and
curates more than 210 high-performing eco-friendly brands of
household cleaning, personal care, health and wellness, laundry,
clean beauty, baby, and pet care products serving millions of
households across the U.S. each year. By serving as the trusted
destination for conscientious consumers who want to make the right
choices for their families and the planet and providing access to
knowledgeable Grove Guides, Grove makes it easy for everyone to
build sustainable routines and Be a Force of Nature.
Every product Grove offers — from its flagship brand of
sustainably powerful home care essentials, Grove Co., to its
exceptional third-party brands — has been thoroughly vetted against
the Grove Feel Good Standard, which guarantees strict ingredients
criteria, 100% plastic neutral orders, carbon neutral shipments,
and the highest quality performance in addition to being certified
cruelty-free and ethically produced. Grove is a public benefit
corporation on a mission to move Beyond Plastic® and is available
at select retailers nationwide, making sustainable home care
products even more accessible. For more information, visit
www.grove.com.
_______________
1 Direct to Consumer is defined as orders
through the Grove website and mobile application.
2 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.
3 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.
Caution Concerning 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
about long term profitability and growth, continued improvements in
Grove’s first order conversion rate and long term strategy to
efficiently acquire new customers, revenue growth in the second
half of 2024, delivering positive Adjusted EBITDA for 2024, future
increases in marketing spend, third party product expansion, the
focus on use of cash and efficient returns on its use 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 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. 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 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 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 share
and per share amounts)
March 31,
2024
December 31,
2023
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
77,757
$
86,411
Restricted cash
3,325
5,650
Inventory, net
31,451
28,776
Prepaid expenses and other current
assets
3,422
3,359
Total current assets
115,955
124,196
Restricted cash
502
2,802
Property and equipment, net
10,008
11,625
Operating lease right-of-use assets
9,043
9,612
Other long-term assets
2,355
2,507
Total assets
$
137,863
$
150,742
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
8,200
$
8,074
Accrued expenses
11,939
16,020
Deferred revenue
6,569
7,154
Operating lease liabilities, current
1,703
3,489
Other current liabilities
482
306
Total current liabilities
28,893
35,043
Debt, noncurrent
72,533
71,662
Operating lease liabilities,
noncurrent
7,610
14,404
Derivative liabilities
11,313
11,511
Total liabilities
120,349
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
631,991
629,208
Accumulated deficit
(624,481
)
(621,090
)
Total stockholders’ equity
7,514
8,122
Total liabilities, redeemable convertible
preferred stock and stockholders’ equity
$
137,863
$
150,742
Grove Collaborative Holdings,
Inc.
Consolidated Statements of
Operations
(Unaudited)
(In thousands, except share
and per share amounts)
Three Months Ended
March 31,
2024
2023
Revenue, net
$
53,545
$
71,565
Cost of goods sold
23,805
34,310
Gross profit
29,740
37,255
Operating expenses:
Advertising
2,053
8,673
Product development
3,626
4,216
Selling, general and administrative
24,594
38,021
Operating loss
(533
)
(13,655
)
Non-operating expenses:
Interest expense
4,129
3,729
Changes in fair value of derivative
liabilities
(198
)
292
Other income, net
(1,083
)
(4,617
)
Total non-operating expenses (income),
net
2,848
(596
)
Loss before provision for income taxes
(3,381
)
(13,059
)
Provision for income taxes
10
10
Net loss
$
(3,391
)
$
(13,069
)
Less: Accumulated dividends on redeemable
convertible preferred stock
(150
)
—
Net loss attributable to common
stockholders, basic and diluted
$
(3,541
)
$
(13,069
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.10
)
$
(0.39
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
36,262,917
33,747,855
Grove Collaborative Holdings,
Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
(In thousands)
Three Months Ended
March 31,
2024
2023
Cash Flows from Operating
Activities
Net loss
$
(3,391
)
$
(13,069
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Gain on lease modification
(3,139
)
—
Stock-based compensation expense
3,113
4,893
Depreciation and amortization
2,201
1,448
Changes in fair value of derivative
liabilities
(198
)
292
Reduction in transaction costs allocated
to derivative liabilities upon Business Combination
—
(3,745
)
Non-cash interest expense
961
948
Inventory reserve
(505
)
124
Other non-cash expenses
—
77
Changes in operating assets and
liabilities:
Inventory
(2,170
)
3,078
Prepaids and other assets
(14
)
(828
)
Accounts payable
125
1,554
Accrued expenses
(4,082
)
162
Deferred revenue
(585
)
(1,726
)
Operating lease right-of-use assets and
liabilities
(4,872
)
(261
)
Other liabilities
176
316
Net cash used in operating
activities
(12,380
)
(6,737
)
Cash Flows from Investing
Activities
Purchase of property and equipment
(518
)
(784
)
Net cash used in investing
activities
(518
)
(784
)
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
—
(837
)
Repayment of debt
—
(235
)
Payments related to stock-based award
activities
(381
)
(288
)
Net cash (used in) provided by
financing activities
(381
)
1,990
Net decrease in cash, cash equivalents and
restricted cash
(13,279
)
(5,531
)
Cash, cash equivalents and restricted cash
at beginning of period
94,863
95,985
Cash, cash equivalents and restricted cash
at end of period
$
81,584
$
90,454
Grove Collaborative Holdings,
Inc.
Non-GAAP Financial
Measures
(Unaudited)
(In thousands)
Three Months Ended
March 31,
2024
2023
Reconciliation of Net Loss to Adjusted
EBITDA
Revenue
$
53,545
$
71,565
Net loss
$
(3,391
)
$
(13,069
)
Stock-based compensation
3,113
4,893
Depreciation and amortization
2,201
1,448
Changes in fair value of derivative
liabilities
(198
)
292
Reduction in transaction costs allocated
to derivative liabilities upon Business Combination
—
(3,745
)
Interest income
(1,086
)
(424
)
Interest expense
4,129
3,729
Restructuring and severance related
costs
(2,885
)
46
Provision for income taxes
10
10
Total Adjusted EBITDA
$
1,893
$
(6,820
)
Net loss margin
(6.3
)%
(18.3
)%
Adjusted EBITDA margin (loss)
3.5
%
(9.5
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240514643253/en/
Investor Relations Contact
ir@grove.co
Media Relations Contact
Ryan.Zimmerman@grove.co
Grafico Azioni Grove Collaborative (NYSE:GROV)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Grove Collaborative (NYSE:GROV)
Storico
Da Feb 2024 a Feb 2025
