Grove Collaborative Holdings, Inc. (NYSE: GROV), a leader in sustainable consumer products and the world’s first plastic-neutral retailer, has announced its financial results for the third quarter of fiscal 2024, which ended on September 30.
Key Developments:
CEO Jeff Yurcisin emphasized the company’s ongoing transformation, focusing on profitability, balance sheet improvement, revenue growth, and sustainability. “Our mission remains clear: to become the go-to destination for consumers seeking environmentally-friendly products that promote both human and planetary health,” he said. Grove is also enhancing its customer communications to integrate sustainability more effectively into their offerings.
Yurcisin highlighted a strategic shift to prioritize e-commerce while maintaining operational efficiency. Additionally, Grove secured a $15 million investment from Volition Capital, allowing the company to pay down term debt, thus reducing interest costs. The company anticipates sequential revenue growth in the fourth quarter, staying on track to achieve sustainable and profitable growth.
Q3 2024 Financial Overview:
- Revenue: Grove reported $48.3 million in revenue, a decrease from $52.1 million in Q2 2024 and $61.8 million in Q3 2023. This drop was primarily due to fewer repeat orders and reduced advertising spend. Additionally, retail revenue saw a $0.8 million decline due to estimated markdowns.
- Gross Margin: The gross margin was 53.0%, slightly down from 53.9% in Q2 2024 and 53.8% in Q3 2023. The decline was partly due to markdowns in brick-and-mortar retail and the elimination of certain customer fees.
- Operating Expenses: Operating expenses decreased by 7.6% from Q2 2024 to $32.3 million, with the year-over-year reduction of 13.4%. The decline reflects cost-saving measures, including reductions in personnel, facilities, and other operational expenses, though this was partially offset by moving the Reno fulfillment center.
- Net Loss: Grove reported a reduced net loss of $1.3 million, compared to a loss of $10.1 million in Q2 2024 and $9.8 million in Q3 2023.
- Adjusted EBITDA: The company reached breakeven adjusted EBITDA, compared to $1.1 million in Q2 2024 and $0.2 million in Q3 2023.
- Cash Position: As of September 30, 2024, Grove had $55.6 million in cash, a decrease from $82.6 million at the end of Q2 2024. This decrease reflects the prepayment of $42 million in debt, offset by the $15 million investment received from Volition.
- Cash Flow: The company posted operating cash flow of $0.8 million, marking its fourth consecutive quarter of positive cash flow.
Future Outlook: Grove plans to use part of the Volition investment to fully repay its remaining term debt by November 30, 2024, leaving only $7.5 million under its asset-based loan facility.
This results-driven transformation aligns Grove with its long-term goal of becoming a leading, sustainable and profitable company in the consumer product sector.
