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Grove Collaborative (GROV) Q2 FY26 earnings call: guidance

Earnings call· Jun 2026 (Q2 FY26)· Consumer Staples· Aug 6, 2026

Source: earnings call transcript

Executive summary

Grove Collaborative Q2 FY26 — Sequential Revenue Growth and Positive Adjusted EBITDA

Grove Collaborative delivered sequential revenue growth and its third consecutive quarter of positive adjusted EBITDA, demonstrating progress in its transformation plan. The company is focused on enhancing customer experience, expanding into new categories via dropship, and strategically increasing advertising investment to re-accelerate growth while maintaining financial discipline. The transition of the CFO is noted, with a search for a successor underway.

Highlights

5

  • Net revenue grew 1% sequentially to $36.6 million, marking a turnaround from prior declines.

  • Adjusted EBITDA was positive $0.5 million, representing the third consecutive quarter of positive adjusted EBITDA.

  • Operating cash flow was positive $1.3 million, reflecting strong working capital management and inventory reduction.

  • Net revenue per order increased 6% year-over-year to $69.19, driven by higher-priced items and promotional efficiency.

  • Outbound shipping costs improved due to an updated carrier strategy, contributing to a 27% year-over-year decrease in operating expenses.

Concerns

5

  • Net revenue declined 16.9% year-over-year, primarily due to a smaller active customer base and past e-commerce platform disruption.

  • DTC total orders decreased 23.6% year-over-year to 489,000.

  • Active customers totaled 509,000 at quarter end, down 23.3% versus the prior year.

  • Gross margin decreased 190 basis points year-over-year to 53.6%, impacted by one-time disposals.

  • CFO Tom Siragusa will be leaving the company on August 16th to pursue a new opportunity.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Net Revenue
$142.5 million to $152.5 million
high materiality
High
Full-year 2026 Adjusted EBITDA
positive low single-digit millions
high materiality
High
Net Revenue
sequential improvement
medium materiality
High
Advertising Investment
disciplined increases
medium materiality
Medium
Dropship Expansion
expand into larger format categories
low materiality
Medium

Product announcements

ProductTypeDetails
Updated subscription experiencelaunch
Dropship capabilitieslaunch
Relaunched mobile applicationroadmap

Risks & headwinds

Year-over-year revenue decline Q2 FY26

16.9% decrease

Mitigation:Strategic advertising investment, improved customer experience, dropship expansion, Amazon channel growth.

Smaller active customer base Q2 FY26

509,000 active customers, down 23.3% YoY

Mitigation:Increased advertising investment, re-engaging lapsed customers, improved customer experience, new customer acquisition.

E-commerce platform disruption Throughout 2025, impacting Q2 FY26

Lagging effects on customer attrition

Mitigation:Enhanced e-commerce experience in place, focus on customer retention and acquisition.

Gross margin decrease Q2 FY26

190 basis points decrease to 53.6%

Mitigation:More targeted promotional strategy, Grove Green Rewards loyalty program.

CFO transition August 2026

Tom Siragusa leaving August 16th

Mitigation:Search for a successor underway.

What to watch in Q3 FY26

Sequential revenue improvement

Q3 FY26
Current 1% sequential growth in Q2 FY26
Target Continued sequential improvement

Why it matters

This is a key indicator of the company's ability to re-accelerate growth and move past prior year's challenges.

Furthermore, we still expect sequential revenue improvement in each remaining quarter in 2026.

Find out whether GROV delivers this. Inve re-checks your case every morning.

2 min read 6 chapters

Detailed narrative

Strategic Pillars and Financial Discipline

Grove Collaborative is executing its transformation plan around four strategic pillars: sustainable profitability, balance sheet strength, revenue growth, and human/environmental health. The company achieved its third consecutive quarter of positive adjusted EBITDA and positive operating cash flow, demonstrating financial discipline. Operating expenses were reduced by 27% year-over-year, reflecting structural headcount reductions and lower shipping costs.

Revenue Stabilization and Growth Initiatives

Net revenue grew 1% sequentially to $36.6 million, indicating stabilization after prior year's e-commerce platform migration and reduced advertising. Growth was driven by non-DTC channels like Amazon and QVC. The company plans to re-accelerate growth through a full-funnel approach to customer acquisition, including disciplined increases in advertising investment, supported by improved customer experience and unit economics.

Enhanced Customer Experience and Subscription Model

An updated subscription experience was launched in Q2, designed to enhance the customer journey and drive retention and loyalty. Subscriptions are core to the business, present in over 80% of orders, allowing customers to build and adjust baskets of household essentials. The company also highlighted the upcoming relaunch of its mobile application as another customer experience improvement.

Dropship Capabilities and Amazon Channel Expansion

Grove launched dropship capabilities, enabling expansion into new categories like mattresses and air filtration without inventory ownership costs. This strategy broadens assortment while maintaining balance sheet discipline. The company is also expanding its presence on Amazon, aiming to reach a substantial addressable market of shoppers seeking curated, trustworthy brands, without cannibalizing its D2C platform.

Focus on Human and Environmental Health

The company is increasingly emphasizing human health, recognizing its inseparability from environmental health. Grove maintains stringent curation protocols, banning thousands of ingredients from its products. The 2025 Annual Sustainability Report highlighted a new company low plastic intensity score of 0.9 pounds per $100 of net revenue and over 18.7 million pounds of nature-bound plastic collected since 2020.

CFO Transition

Tom Siragusa, CFO, will be departing Grove Collaborative on August 16th to pursue a new opportunity. Management acknowledged his instrumental contributions to the company's financial progress, including expense and balance sheet discipline. A search for his successor is currently underway, with updates to be provided as appropriate.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.