Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: You mentioned having some stockouts that you've been dealing with lately. Did those impact Q4 at all? Or is that really more of a Q1 issue? And then can you give us a timeline of when you think that will be resolved? A: Alex, it's Jason. Thanks for that question. Yes, the stockouts did impact us, particularly in DTC and sometimes at retail. We estimate it cost us close to $1 million in sales. We've prioritized our subscribers and main customers to manage this. We've identified new suppliers to expand our supply, and while there will be some impact in Q1, we expect robust growth and are reiterating our 20% to 25% growth target for the year.
Q: Talking about some of your products that don't have coconut in them, I was impressed to see the coffee category grew significantly. Can you talk about what's driving that growth? A: Yes, Alex, our coffee solutions, including ground and whole bean coffees, creamers, and instant lattes, have been doing exceptionally well. We've seen strong uptake in both wholesale and online channels. We've taken a small price increase due to cost inflation but are focused on gross margin dollars over percentages. Our functional coffees and lattes with performance mushrooms are driving consumer demand.
Q: Could you maybe be more specific about how much you're willing to give up in gross margins in the early part of 2025? A: George, this is Anya. We intend to hold our gross margins in the high 30s despite inflationary pressures. We've taken pricing in our coffee business and are willing to trade off a couple of margin points for market share and top-line growth. We don't provide quarterly guidance but stick with our annual guidance of gross margins in the high 30s.
Q: Regarding the new sizing on the liquid product, can you give more specifics about velocities or what you've seen since that product has hit the shelf? A: George, it's too early to tell. The transition went well with minimal inventory waste and no meaningful loss of distribution. We expect less than a 1:1 translation in volume units but are prepared to support demand. We have high hopes for this product and anticipate potential outperformance, but it's too early to call it.
Q: Is there a ceiling on the supply of coconut milk powder, and could this be an ongoing challenge? A: George, we barely dent the overall supply of coconut milk powder. The issue is the level of quality we demand, which requires careful supplier qualification. We thought we had demand captured by a single supplier, but delays and increased demand led to stockouts. We expect to resolve this by the end of Q1 and are confident in meeting future demand.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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