Recent GROV transcripts
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Alexis Tessier | Investor Relations. |
Stuart Landesberg | Co-Founder & Chief Executive Officer |
Sergio Cervantes | Chief Financial Officer |
Dana Tesley | Telsey Advisory Group |
Good day, ladies and gentlemen, and welcome to the Grove Collaborative 2Q 2022 Earnings Call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Alexis Tessier. Ma'am, the floor is yours.
Hello, and thank you all for joining us today. call Sergio Co-Founder Cervantes. today's Landesberg; CEO, on CFO, and me are and Grove’s, Stuart With
Before the forward-looking get Safe we started, Harbor. I'll quickly cover
about to considered results, and cause the future successfully and of respond of statements risks risks we uncertainties differ statements to today Some our may involve business be number that our ability could prospects, Such actual strategies, business are financial materially. to industry forward-looking. results trends that make our a
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our and changes. in as statements described the SEC for change As filings, the facts can business assumptions underlying world our and these
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will presentation, are During Stuart. directly the to discuss that, in our and today's non-GAAP website. over Relations financial earnings measures provided I'll certain on most these of With turn measures. to are which we it release also also earnings call, available Reconciliations our items Investor comparable financial GAAP non-GAAP supplemental
Alexis, our you, our listing good Thank earnings to I'm company. first public as June call a on today you afternoon, speak to excited and after everyone.
change. as quarter, success details we performance share is why lead and on shareholder household We will value plan, for results in the how industry the our fit second our creation our Grove transformational to within we positioned products believe
personal for about problem. impact majority being a for concerned historically We in the a home on is products In with and years, a is of to alone. of a have we Essentially, trillion particular, human a the and us care our us the company their of impact is health. though, and plastic. industries both our in record home leading at products terrible industry each solving force for that today. products Grove, you planet. can on track use industry not story, started. that for is put, consumers, newer bath face our got and to Grove record for sustainable. industry One footprint consumer transition tip and in $X will health and mixed massive industry US almost environmental human Simply commerce and $XXX provide wrapped Change and our in positive is both for leader The those in shampoo, XX tissue, For global The that the transformation. plastic look care on TAM Grove that are on that single-use environmental in detergent, Grove be vision plastic the TAM overwhelming health. for me of the mission waste. spear, good problem all operate their focused Grove, our current of Grove and XX% soap, let wash, first is dish the the different. the US soap, background is all laundry products, hand a market that are the for billion carbon plastic personal The in day, inevitable, At opportunity is track
has get climate company change action this has tomorrow serve consumer-led families here. this been only on as started to It plastic building the a business accelerating. I are We more of on is time, offering and to specifically journey the and a of natural direct-to-consumer portfolio as personal care. engaged products user built in best company Over sustainable curated Grove brands initially a base. loyal a home and third-party XXXX, and in from
for position, product market that coming only glamorous our perform sustainable they're second the Co., well gradually, our most for a home really a to efficacious. as big authentic than think well the rest long-term along used Co. the efficacy means loyalty. consumer products health set the customer but products It's sustainable That well that with that two own That Good it. will than, a leveraged of and the of launched also but consumer decade such the zero better in under the tent conviction focus care. doesn't a leads to but our presence, along Plastic, This, or are innovation future products on trends I truly category about perhaps efficacy, Superbloom uniquely rich industry. truly curve our flagship and our around map target million far is more firmly a waste for are have pausing innovative that Peach incubator efficacious. health to consumer, awareness, believe current launch zero design environment, and today. our good X.X intense The on home brands and and We've of mentioned, in personal over least not need clear better important to efficacy, brand, centricity for strong ahead the other Grove consumer in Grove is DTC We Co., active sustainability. value and as the and better a years the relationships, create sustainability. the of We’ve not road we deliver home plastic drives Not of as brand disruptive and data leaders in market are being today the allowed to in products in establish I bell as sustainability to Grove as always in addition we Grove us leading has one and set of with we work If and are consumers on significantly middle build care Fur loyalty. sought exceptional or highly care brands, customers our and number brands. building last spent pillars, notably We've worth platform. essential customer as
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Now, our performance to moving the on in second quarter.
of our million trended from revenue months than on year, remainder XX% Our $XX.X improvement and the for $XX.X of walk value XXXX, macro outlook in improved through year's the effort revenue down million, in line These was expectations. specifics and of and EBITDA $XX.X year-over-year adjusted XXXX. results raise on Adjusted we EBITDA and guidance unprofitable sequential a to both In essentially guidance drive six year Sergio pleased of XX% loss notable quarter, for of and to was profitable significant XQ shareholder loss basis a in the first the first despite beginnings a the internal $XX.X environment. our total, are eliminate will last margin the the performance with full a our our represent in with the XXXX. loss in compared for Based but million, our million, second results revenue of to moment. margins quarter creation plan. our to be in order through the better line
reusable, represent either in benefit, that position the on of products, are While came the are of the pull advertising In in drive continue in trends which spend. to there. back pleased the margins Of long-term beyond fact plastic, standard. the pandemic steps from the as and that of as brands plastic This we second meet year-over-year our to of decision including profitable XXXX. better we refillable comparisons certainly for strategic revenue we well the company's XX% some zero Grove reflects the net ourselves is believe least taken note, comparisons have significantly XX% the we progress from the we gross giving decisive our up success, sequential all increased quarter, quarter or to quarter back business the
hope that we revenue and call plastic first XXXX. on a XQ XQ the industry do pounds brands, X.XX of to same, to We that in We intensity, We pounds X.XX plastic to Grove plastic a issue report also of $X.XX plastic encourage plastic in from $XXX by the industry in improved on this are improved pounds waste Across of intensity metric. in revenue the from metric XXXX. change. to improved disclosing can for revenue. spotlight Straight-wide, this others in intensity driving $XXX on per the shining we plastic metric, meaningful in believe per the all we to plastic $XXX X.XX of
and returns profit and shareholder coming expanded drive growth, in actionable put shareholder a We value years. have strong sustainable the place clear to plan creation over
expansion; seen omnichannel And each, two, plan creation and many marketing. net up on improved I'll three, four value we Our consists efficiency; Like touch this elements: to of ours, channel. material like starting discipline. others, similar social. businesses we've paid on OpEx persistent revenue one, inflation and cost in with management; marketing grew four, many
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have this, the significant implementation, we made segment scale our been marketing basis. will year, stack, the historically and target our of This we progress marketing digital fairly to an technology materially improve our on will for which finish upgrading individual which on ability Beyond business. unsophisticated has
customer to upgrade and begin more on the next year. engagement so this expect quarters having even fourth in an impact and We third
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hand national top Nielsen omni-channel the also As dish, achieved expansion only a year our this and brand results I at doubled XX Last with our we us hand room over Target build reset driving to Target more their announced and strategy We to a little that dish According of bring in product month, one selection are we channel. brands shelf momentum broader mentioned our this edition target.com our products our and of we assortment in customers. in and reusable our spray were include year. a concentrates, number status April. to We are within did helping first on detergents stores launch cleaners than endorsement and sense, of XXXX. in wash. brand's to conventional new in earlier, into incredible in and laundry including Target data, ability we in May, all An
co-shoppers Target category, the were numerator as at shown In to by fact, XX% new data. of growth
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end caps beautiful While still comment on to all performance, had too stores and merchandising. the early of
partners distribution There year-over-year, opportunity about grow and XXXX for take retail door XXX,XXX to we a enormous. XXX just is distribution. by continue the SKUs retail have to expect US, and in in over with have is This XXX% additional post can addressable market opportunity upside. We we our discussions with to
physical Not brand, Plastic, shampoo, loving Amazon making Flywheel where Amazon, addition beginning off consumers small zero plastic strength care to early Peach conditioner progress is retail, on on and accelerate our Grove strong a bar-format wash. base. with body brand's In the but to personal is seeing is
is drive small, and six offering the more DTC the are months line material growth, believe Omni-channel to will with balance in us to our we two, than top allow quite growth we've expand still While efficient learnings capital durable the to continue the at line doubled Amazon. excited growth and and last of bottom business significantly extension.
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working to and the sustainable the we Lastly, the we operate On highest achieve in first ROI profitable to our force right-size XX% implemented initiatives. we see to that expenses across to the while more at board of the end opportunities quarter, growth. are reduction of reallocating operating resources top efficiently
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have becoming and creation much more do, XXXX. goal continue on against We free we by advancing plastic will so of while focus plan, executing to value to XXX% our our shareholder
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year-over-year down revenue on from new of by focuses reduction the XX% net strategic $XX.X acquire the XX% and in XXXX. million are quarter company was negatively impacted profitability. spend Both customers as comparisons advertising first to quarter the Second
spend. addition, pandemic In to orders in active on were shopping XX% strategic XX-month down XX% in returning impacted to active the also consumers the XX% year-over-year elevated X% by quarter-over-quarter, $X.X orders and our year-over-year lapping impacted Similarly, were year, customers reduction was down million. decline total and categories a trailing quarter-over-quarter, advertising basis. with to pre-pandemic shopping negatively million patterns. And last were Total $X.XX and coupled year-over-year, by customers
we spend profitable growth. average steps declines to expect to As in see growth we active on XXXX. Accordingly, have continue revenue, pricing balance and taken total net in of earlier, reduce and XXXX and returning by stabilizing the year orders through the refocus in in we inefficient decreases discussed to to before driven customers,
options margin Gross net positive quarter-over-quarter to order. On the flip points XX.X%, was per points up a Advertising with improving to on a driven net and revenue acquisition in saw revenue discounts long-term patterns the $XX.X quarter-over-quarter EBITDA the DTC side, as as strive expenses of was seasonal less and membership down decision in year-over-year SG&A of of increase existing stock-based to favorable as revenue was quarter-over-quarter stock of awareness, and retention, percentage by strong we brand spend and by driven SVU $XX.X the million. subside, our which expenses and went normal a trend, stock be X% condition, year-over-year normal performance. increasing the vesting Grove objectives the spend year-over-year due we year-over-year and basis lower freight strength result discounts seasonal down the certain seasonal. order of decrease for was in margin focus improvement driven Part and partially decline XX.X%. company customer year-over-year, increasing support sequential up to environment catch-up business, to pandemic XX XX% continued by an as by $XX.X to rate year-over-year, efficiencies, by increase public, average fell XX million, that reflected on margins increased to partially company's a customer and value, offset marketing in to when reflecting due on largest trends optimizing VIP to line performance inbound to volume. lower in XX% quarter-over-quarter and advertising January expenses quarter, gross basis reflects costs with our basis and spending units The up the in increased basis costs, reduce fulfillment its also product XX.X% offset the predominantly was the The balance of XXX month. meeting million third-party was The year-over-year term. compensation, points points and long driving to XX% decline order retail business. X% revenues, quarter-over-quarter tends XXX increase continued sequential brand XX% our of seasonality in as per continuous in
SG&A was have of a expense the X% and the decline decrease and by force March quarter first or associated the expenses, same a costs XXXX. with the LBT, partially XX% company reduction last being public $XX.X Excluding in marketing less other year less other in period in than million and fees. been offset would driven quarter than The predominantly professional by in quarter-over-quarter
of the in percentage net have XXXX. SG&A compared first XX% a expense would first in year been XX% and last to of revenue, quarter quarter the XX% As
million in in with and significantly the loss line sales. in million, essentially smaller despite $XX.X lower first second EBITDA $XX.X the loss the than last million quarter quarter, $XX the adjusted Our year was of loss
year-over-year, slightly improved costs to market due fell margin price gross increases surcharges points X,XXX XXXX. points primarily rate. improvement lower EBITDA as loss from Net XXX SG&A the was million, adjusted XX.X% year outbound a the of loss of quarter compared the Our in by million and a in $XX.X a the basis higher net million The in compared $XX.X percentage the but basis second to revenue, shipping and minus by $XX.X quarter last of loss the primarily increased of to and quarter-over-quarter quarter driven quarter was of reduction by in first advertising. first XXXX to
well the down which Inventory goal end finished the $XXX million down $XX.X of business We focus balance $XX with of inventory an available of the debt our additional combination. and facilities. an under cash managing $X June our balance conjunction the sponsor from existing and in included completed of Corp. year. reflects area our continues On We II Group XXXX. with raise group be of XXXX as million or as to now down the quarter with ended balance investments. investment million Virgin XX, equivalents, sheet. by capacity million $X.X VGII The in PIPE quarter from was million, we This the year-end million number it combination Turning the €XX June The business capital transaction an to VGII. the with and Acquisition end and the from cash affiliate a with of of XXXX, in an new
to July common Grove’s to XXX the to Yorkville shares million LP, execution quarter, Class certain Purchase Agreement agreement, of which a Holdings million to the following allowing X, LTD, with to of sell an we an months into at us and entered previously stock from on of the of Standby announced March In concurrently $XX.X closed of stock business which closed XX a purchased the XX, agreement on combination. Advisors common and conditions. the Corvina Grove, during A million which $XX.X of XXXX, sponsor company, Global, subject $XX the affiliate backstop addition, the affiliate Equity of request stock purchased with with end we the VGII of Corvina Subsequent common purchase million combined of XXXX, VGII, of up pursuant
We to evaluate will additional capital. continue opportunities raise to
the our to mentioned. will spend raising solidify existing our year Now macro business year turning customers. outlook. are the We uncertain guidance, the efficient and half our our an average value the full environment, on more second in of performance for the believe that Stu of expectation the DTC for of and in as to-date, higher Factoring the back half order performance we of back advertising year
profitability Additionally, back in the of the in half which creation as implementation compared first half. our result significant the of our improvements guidance year, plan, the to will value in reflects
million from a by XX-month XX.X% we we're period incredible revenue XXXX, million minus minus as the million new previously. costs. we XX% to ending up achieving as net advance to of company EBITDA on to reach to Adjusted XXXX, up For $XXX.X million expect XX.X%, excited our December XX, $XXX our public while XX%. this from $XXX.X $XXX chapter journey realize to In margin to of summary, financial geoplastic
For of of the our creation plan and progress planet, our the our maximize with our value power benefit and I we making platform, retail am on all our partners accelerate pleased environment, stakeholders. expansion the are DTC ready of the we marketing operating years drive in and look results and expenses, Operator, forward now improving in to to our in further improvement efficiencies we growth the are and timely profitability reporting for questions. achieve a ahead. market. We quarters
from Thank state the Please you. The floor comes Dana is question now open for questions. question. first [Operator Instructions] Tesley. Our
afternoon, good everyone. Hi.
And the and there for are when where the cadence that the profitability where are spend, think about you expense retail cash ad you. with to sales what of you've side, opportunity? the Thank that being do ultimate see entered orders? the the the And then about underway, on as example, think most inefficient of contribution margin. goal the you retail revenue fulfill capacity you able reductions in you into, is standard and and buckets, that As in the
Dana. question. the Thank you you, Thank for
structure that to is the plan markets, achieve we capacity So it. and as have and right capabilities, mindset see to with profitability feel and have we the strongly shared plan basically, we that going forward, the our we the the path
mentioned the this kicking call. basically, as for of are is start XXXX done, to in have the during half cadence what further reductions we So in we second previously to what
the investment having achieve second of we site rate where what this have with Stuart to combination coming we do the I that the gross and basically priorities, if XXXX So want off basically, been it, or OpEx kick all ranking, will, the during basically, in we sequence. you the if half most I answering part meet coming benefit the you these accelerate let that were second -- in as will and That's of bond some explaining. But would put It's that's at answer are of view basically would I question, point efficiencies or all in of. in the the a striving for. out of the and order question. XXXX. of performance think think of margin see P&L to out we the most
the appreciate Thanks, Dana. Yes. -- It's I question.
It's I balance to in our especially stronger to because core the cost that higher stronger efficiently. relative we've said hard that will where lowering I the of changes year it profitability we're year-over-year. hopeful course, continuing And to see the customer of continue drive of serve drive to full operate think through on P&L drive business think seek more dollar so gross driving got biggest to most strong area terms a margins, is one it We the and and drive well, the which many bit, that a a Probably would success sort the bottom average or in really driving point to pin I in base. and are from for And million we line, really is will we to little Sergio impact the most approach. basis. double-digit the 'XX. down go can as higher there, of basket
Thank you.
Instructions] There turn further remarks. Okay. questions. I'll [Operator for closing back Stuart to are no it
the and the to team's many to in how a growth material reporting want how but future as have I you. everyone, ability much conviction that the say, story for now Thank innovation over to Thanks, just on we to we share our am joining. you lead I years grateful and with change public to the way a a opportunity progress. returns Thank ahead. I to continue quarters material company have to our where many, forward Look shareholders environment, not also much. back future the for drive, quarters, towards just for make continue as
you. call. your you Thank conference concludes thank today's participation. This for We
your day. lines time, You and at have may a disconnect great this
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