SAN FRANCISCO- 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.
* 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'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: See full results at:
https://investors.grove.co/news-events/press-releases/detail/82/grove-announces-first-quarter-2024-financial-results
Investor Relations Contact
ir@grove.co
Media Relations Contact
Ryan.Zimmerman@grove.co
GROVE COLLABORATIVE HOLDINGS, INC. 
