Hello, and welcome to The Vita Coco Company's first quarter 2026 earnings conference call. My name is Howard. I'll be coordinating your call today. Following prepared remarks, we will open the call to your questions and instructions to be given at that time. I'd now like to turn the conference over to John Mills with ICR. Thank you, and welcome to The Vita Coco Company first quarter 2026 earnings results conference call. Today's call is being recorded. With us are Mr. Michael Kirban, Executive Chairman, Martin Roper, Chief Executive Officer, and Corey Baker, Chief Financial Officer. By now, everyone should have access to the company's first quarter earnings release issued earlier today. This information is available on the investor relations section of The Vita Coco Company's website @ investors.thevitacococompany.com. Also on the website, there is an accompanying presentation of our commercial and financial results. Certain comments made on this call include forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and other filings with the SEC for more detailed discussion of the risk factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. During the call, we will use some non-GAAP financial measures as we describe our business performance. Our SEC filings, as well as the earnings press release and supplementary earnings presentation, provide reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures and are available on our website as well. With that, it is my pleasure to now turn the call over to Michael Kirban, our Co-founder and Executive Chairman. Thanks, John, and good morning, everyone. Thank you for joining us today to discuss our first quarter financial results and our expectations for our full year 2026 performance. I want to start by thanking all of our colleagues across the globe for our strong operational and financial start to the year, while also staying committed to The Vita Coco Company and advancing our mission of creating ethical, sustainable, better for you beverages that uplift our communities and do right by our planet. I'm thrilled with our momentum and by the acceleration we have seen in the quarter. Our strong inventory position and quick reaction to higher demand have enabled us to deliver very strong first quarter results in global net sales, gross profit, net income, and adjusted EBITDA. Coconut water remains one of the fastest-growing categories in the beverage aisle according to our retail data for the first quarter 2026, growing 31% in the U.S. and 63% in our measured European markets year-over-year. For the quarter, Vita Coco Coconut Water, excluding our coconut milk-based products like Treats, grew 40% in retail dollars in the U.S. I'm very excited about our international business, which continues to grow even faster than our Americas business, driven primarily by our strong performance in Europe, where our organizational and marketing investments are paying off. We saw 57% retail dollar growth this quarter in our measured European markets, gaining branded share across all our major markets. We continue to explore opportunities in international markets where we believe that we are well-positioned to enter and drive profitable growth long term. Looking forward, this summer, we will continue to double down on active hydration across our markets as a driver of consumer growth, positioning Vita Coco as the natural choice for performance-minded consumers while expanding more deliberately into sport and recovery. With 3.5x the electrolytes of the leading sport drinks and clean ingredients, we believe that Vita Coco is uniquely positioned to recruit new consumers, increase usage frequency, and further unlock the next phase of sustained consumer growth. We expect to maintain strong growth trends as we invest in and develop the coconut water category in our priority markets and develop and nurture new markets. Our asset-light model, one leading market share, and strong cash generation positions us well to take advantage of the opportunities ahead. As I've said before, I believe that the coconut water category is in the very early stages of gaining mainstream appeal on a global level. Coconut water appears to be transitioning from niche to mainstream, and we are at the forefront of that trend. If we continue the household penetration and consumption gains that we're seeing, I'm confident that coconut water will one day be as large as some of the major categories in the beverage aisle, which bodes well for our future. We are focused on building the capacity and organizational capabilities to take advantage of this opportunity. Now I'll turn the call over to our Chief Executive Officer, Martin Roper. Thanks, Mike, and good morning, everyone. I'm pleased to report Vita Coco's robust first quarter performance. Our net sales were up 37%, driven by the strong growth of Vita Coco Coconut Water of 42%. Our brand trends are very healthy in all our major markets, and the acceleration in retail scans that we saw this quarter contributed to our ability to deliver net sales ahead of our expectations. We believe that our U.S. Vita Coco branded business is benefiting from both increased household penetration and healthy velocity per household growth, which is combining to produce volume growth in U.S. retail scans of 36% in the 13 weeks through March 29th, 2026, with the positive net impact of the two price increases taken in the U.S. last year contributing an additional 3% to our retail dollar sales growth. Our year-to-date branded scan results in the U.S. accelerated even before accounting for the impact of the earlier major club promotion this year versus last year. We estimate based on underlying trends that through the end of April, which will account for a like-for-like view of key promotions, that our Vita Coco brand will have grown 30% in U.S. retail dollars. This includes a positive impact from the Walmart reset, which we estimate to be approximately 5% to our year-to-date results. As Michael Kirban noted, the retail scan performance in all our major markets was strong and has accelerated during the quarter. I would refer you to page seven of our quarterly investor deck for the numbers and source of this data. Please note that we are now using Nielsen data for all European markets, while continuing to use Circana for U.S. retail scan reporting. In our focus European markets, Nielsen co-covers a broader range of retailers, including more private label-focused channels, giving us a better view of market size, share, and our potential than we previously had shared. Our total reported Americas shipments were very strong, with branded shipments benefiting from a shift in timing related to a club promotion, which fell more heavily in April last year versus March this year. While the change in timing of the shipments for this promotion means this quarter's growth rate should not be used to project full-year trends, the underlying acceleration in demand across our business ahead of our expectations is exciting, and has caused us to raise our full-year net sales outlook. We are seeing cost of goods year-to-date in 2026 benefit from the reversal of tariffs and from lower ocean freight costs in the full year 2025 levels, with those benefits partially offset by increased finished goods costs driven by inflationary pressure, combined with some weakness in the U.S. dollar and increased domestic logistics costs. Our observed impact to date from the recent events in the Middle East is seen mostly in inflationary factors at our manufacturing partners, particularly packaging costs and energy, and in minor fuel surcharges on ocean freight, with some further increased domestic transportation costs due to fuel price increases. We believe these cost increases are manageable and are incorporated into our guidance. We are in discussions to enter into fixed rate agreements with several ocean freight carriers, have not yet increased our coverage beyond the agreements that we disclosed in February, that covers approximately 25% of our expected 2026 ocean shipping requirements. As we look to the balance of 2026, we expect full-year healthy brand growth in our focus markets and accelerating growth in private label, benefiting from the regained business referenced earlier and the start of shipments for the new business. We believe that we are currently well-positioned with our current inventory and supply capability for the planned demand. We now expect to operate the year at between 85%-90% of committed capacity, supporting our higher-than-planned growth through increased capacity utilization. We are working to expand the capacity again for 2027 and beyond to meet our expectations for continued healthy coconut water growth in our major markets, as well as for the potential for growth in our smaller markets and our aspirations to enter into new markets. To summarize, our category is very healthy. Our brand and private label business are strong. Our supply chain is performing well and anticipated to support our expected growth. We are confident in our team's ability to execute and deliver on our plans for 2026, and our confidence in the category and Vita Coco brand trends remains very high. With that, I will turn the call over to Corey Baker, our Chief Financial Officer. Thanks, Martin, and good morning, everyone. I will now provide you with some additional details on the first quarter 2026 financial results and our outlook for the full year. For the first quarter, net sales increased $49 million or 37% year-over-year to $180 million, driven by strong Vita Coco Coconut Water net sales growth of 42% and private label growth of 28%. Our private label shipment trends for the quarter represent very strong international private label shipments and a return to growth in the Americas. The Americas private label shipments do not yet reflect the new U.S. account announced last year, where a major retailer is launching Tetra Pak private label for the first time, as shipments are expected to begin in the second quarter. On a segment basis, within the Americas, net sales grew 32% to $148 million, led by Vita Coco Coconut Water that grew net sales by 37% to $118 million. This was driven by a 29% volume increase and a 6% net price mix benefit. Private label increased net sales 15% to $24 million, driven by an 18% increase in volume and a price mix decrease of 2%. Our international segment net sales were up 72%, where we saw continued exceptional net sales growth across branded and private label coconut water. Vita Coco Coconut Water net sales grew 71%, and private label increased 86%. Consolidated gross profit was $72 million, an increase of $24 million versus the prior year. Gross margins finished at 40% for the quarter. This is up approximately 320 basis points from the 37% reported in Q1 of last year. The increase in gross margin resulted from better coconut water pricing and lower ocean freight, partially offset by increased finished goods, the impact of tariffs and slightly higher domestic logistics costs. The remaining $2 million of tariffs capitalized in inventory at the end of 2025 fully flowed through our P&L in Q1. Moving on to operating expenses. SG&A costs increased $9 million- $38 million, driven by increased investments in people resources focused on driving future growth, including increased performance-based stock comp expense, increased marketing spend, and higher distributor-related expenses. Net income attributable to shareholders was $30 million or $0.50 per diluted share, compared to $19 million or $0.31 per diluted share. The $12 million increase in net income was primarily driven by the increase in gross profit, partially offset by higher SG&A investments, increased income tax expenses, and a foreign currency loss this year versus a gain last year. Our effective tax rate for Q1 was 18.6% versus 22.5% last year. The decrease in the effective tax rate is largely driven by more favorable discrete tax items. Adjusted EBITDA was $39 million or 22% of net sales, up from $23 million or 17% of net sales in Q1 2025. The increase was primarily due to the increased gross profit, partially offset by higher year-on-year SG&A expenses. Turning to our balance sheet and cash flow. As of March 31st, 2026, our balance sheet remained very strong, with total cash on hand of $202 million and no debt under our revolving credit facility. For the quarter, we generated $5 million of cash, driven by strong net income, partially offset by increases in working capital, driven primarily by a $39 million increase in accounts receivable, partially offset by a $25 million reduction in inventory, both driven by very strong sales in March. The operating cash improvement was mostly offset by share repurchases of $12 million within the quarter. We have started 2026 with exceptional category trends in our major markets, healthy inventory levels, and confidence in our team and our Vita Coco brand. As a result, we are raising our full-year expectations for both net sales and adjusted EBITDA. We now expect net sales between $720 million and $735 million, with expected gross margins for the full year of approximately 38%, delivering adjusted EBITDA of $132 million to $138 million. Our expectations for the strong net sales growth is built on our assumptions for the U.S. category growing approximately 20% and our international business led by the U.K. and Germany maintaining very healthy growth rates. We now expect consolidated growth of Vita Coco Coconut Water net sales mid to high teens, with our U.S. Vita Coco net sales growing low to mid teens due to the impact from the strong year-end 2025 shipments to our DSD partners, investments in distributor incentives to deliver growth, which slightly compresses revenue per case, and the anticipated impact from the launch of private label at a large U.S. retailer. Due to the stronger U.S. category growth and our regaining of some previously lost private label business, we now expect increased private label net sales growth of 35%-40% in the U.S. We expect 2026 growth margins to improve from 2025 levels as we benefit from the branded pricing taken in 2025, the removal of tariffs, and favorable ocean freight rates, partially offset by impacts from the inflation and fuel surcharges Martin referenced previously. We expect full-year branded price increase of low single digits, assuming no further price actions, with a higher mix of private label resulting in minimal consolidated net pricing growth. We expect Q2 2026 gross margins similar to Q1 before seeing slightly lower margins in the second half due to the current inflationary factors and planned price promotion cadence. If inflationary factors related to the current conflict in Iran appear permanent, we will explore potential price increases later this year or in 2027. We expect SG&A to increase high single digits as a percentage of net sales as we increase investment in marketing and key personnel areas to deliver the expected 2026 results and invest for long-term growth. We expect to deliver full-year SG&A leverage of about one point over 2025 as we continue to deliver strong growth with disciplined investments. Finally, we have submitted refund claims through the CBP CAPE Portal for $15.6 million of IEEPA tariff paid last year. There is no guarantee that we will receive any of this refund, and a successful refund is not contemplated in our current guidance. With that, I'd like to turn the call back to Martin for his closing remarks. Thank you, Corey. To close, I'd like to reiterate our confidence in the long-term potential of The Vita Coco Company, our ability to build a better beverage platform, and the strength of our Vita Coco brand and the coconut water category. We have strong brands and a solid balance sheet and believe that we are well-positioned to drive category and brand growth both domestically and internationally. We are confident in our ability and are excited about our key initiatives to drive long-term growth. Thank you for joining us today, and thank you for your interest in The Vita Coco Company. That concludes our first quarter 2026 prepared remarks, and we will now take your questions. Ladies and gentlemen, if you have a question or comment at this time, please press star one one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star one one again. Again, if you have a question or comment, please press star one one on your telephone keypad. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Bonnie Herzog from Goldman Sachs. Ms. Herzog, your line is open. All right. Thank you. Good morning, everyone. Good morning. Good morning. I have a question on your strong and impressive sales in the quarter. Guess hoping for a little bit more color on the drivers behind this. You know, could you provide a little more color on any distribution and space gains this year? I guess I'm trying to understand if there was any pull-forward volume in Q1. Your new guidance implies about 15% top line growth through year-end, which is good, just trying to reconcile, you know, the very strong Q1 growth and I guess some implied or expected slowdown through year-end. Thanks. Okay. Bonnie, I'll take the first part, maybe Corey can take the full year guidance part. As it relates to the first quarter, we obviously benefited from a pull forward of a major club promotion into the March period from April period, which would've, you know, significantly increased shipments in the quarter. We tried to provide some sense of the scale of that by indicating that we expect U.S. retail scans through the end of April, which would, you know, basically negate the movement of that MVM in that time period because it remains in that time period to be approximately +30%. As we look at what is going on, first of all, our international business is very healthy, it's growing ahead of our expectations. Secondly, we feel that we saw an acceleration above our expectations in Q1 in the U.S. business. Yes, the U.S. business obviously has benefited from increased distribution at Walmart through the resets that, you know, occurred in November. We've estimated that that is possibly 5% benefit to our U.S. scan data. Even if you strip that effect out and if you normalize for the movement of the club promotion, the business in the U.S. in the first quarter was very healthy and ahead of our expectations. When we look at what is driving it doesn't appear to be driven by incremental distribution. Spring resets are currently happening, that's not driving the scan data. Our shipments are sort of pretty broadly attracting the scan data. There's not anything weird to call out as it relates to inventory or loading. Just overall, we're very pleased. We're adjusting our guidance up to as the first quarter as it exceeded our expectations. Obviously, we don't know whether it's a permanent or a temporary blip, but we're excited, and we're prepared to deliver on the year as we've outlined. I'll just let Corey talk about the assumptions that went into our current guidance. Yeah, good morning, Bonnie. Just to build on that, we saw, I think, exceptional category growth in Q1 and the brand, you know, through the end of April will be, I think, slightly above the category. We're estimating the guidance built on the U.S. category growing in the range of 20, you know, through the first quarter, it's stronger than that. We do see just above our expectations in the first quarter. Then as we get into the back half of the year, some of the things we talked about entering the year, the distributor inventory build, the Walmart load, we're just kind of watching those things, and they have some timing impact on shipments in Q3, Q4. That is why you see a much stronger Q1 than we'll get to through the back half of the year. How that falls Q2, Q3 is hard to call. We do expect that this the category remains quite healthy at +20%, but not as healthy as it is. It's just some timing on that distributor inventory and the Walmart load into the back half. All right. That was helpful. Maybe just a quick follow-up. Thinking about your innovation pipeline, you know, any color that you can provide to us on any upcoming innovation or new packaging that you plan to be rolling out either still, you know, in the first half or maybe in the second half of this year? There's nothing, you know, significant, I think, since we last talked. Lemonade Treats is out there's another Treats on an exclusive with a major retailer. You know, Treats as, you know, shows up in coconut milk as scan data and the incremental effect of Treats to our U.S. scans is 2%, 3% and I think order of magnitude. That's exciting. The health of our business is being driven by coconut water. We're executing all the major packs as hard as we can. We're still trying to add multi-packs as we've talked about, still trying to add 1 liter to convenience store. We're basically driving the core, the growth is coming from the core. All right. Perfect. I'll pass it on. Thank you so much. Thanks, Bonnie. Thank you. Our next question or comment comes from the line of Peter Galbo from Bank of America. Mr. Galbo, your line is open. Hey, guys. Good morning. Thanks for the question. Good morning, Peter. Martin, maybe just to put a finer point on Bonnie's question around the top line and maybe a little bit more specific to 2Q. Is it fair to kind of think, again, if we average the growth rate over the first half, you know, given the shift in the MVM, that we should be kind of landing in that 30% range, based on what you know today, just as a clarification point? That sounds like a guidance question, so I'm gonna pump that to Corey. We typically don't break guidance down by quarter, Peter, but thank you for the question anyway. Peter, I maybe not follow the 30% through April on shipments. Is that- Correct. Well, the 30% April number is a retail scan number. Yeah. Our shipments to date have been tracking close to retail, so I don't think that's a fair assumption on the U.S. branded shipments. There's always timing and inventory impact, but we're not seeing anything in the beginning of the year that's driving shipments different than retail scans. Okay. Great. The volumes of business, right? One additional point. You know, May, June, July, August are typically peak season. The volumes are a little bigger. First quarter is normally a slow quarter. You know, how to extrapolate these trends to the peak summer is hard. Obviously, we're planning for the optimistic scenarios from an inventory perspective and execution perspective, but it's pretty hard to, you know, project a Q1 increase for the full summer. Obviously, that would be terrific. Right. Okay. Nope. That's clear. Thanks for that. Corey, maybe just as a follow-up on the gross margins. I mean, obviously the performance in Q1 in spite of the MVM, very impressive. You're kind of calling for similar Q2, yet you left the unchanged. I know there's some factors in the back half, maybe you can just unpack a little bit. It would imply a pretty material sequential step down in the second half. I just wanna maybe press on that a bit more and see how much of that is, you know, what you have foresight into versus maybe conservatism on the gross margin line. Thanks very much. I think, Peter, two things have happened to gross margin in the last quarter. One, the branded growth is stronger than expected in guidance, and that helped push margins up. We are starting to see or are feeling some pressures from the conflict in Iran through domestic logistics, fuel costs, packaging materials, factory energy. We are embedding, you know, some estimates of what that will impact. It'll begin later in the year. As we said, we'll evaluate pricing as we get closer, and we see how everything unfolds. Okay. Thanks very much, guys. I'll pass it on. Thank you. Our next question or comment comes from the line of Chris Carey from Wells Fargo Securities. Mr. Carey, your line is open. Hey, good morning, guys. Just one clarification. I believe it was Corey, you know, commenting on just considerations for revenue phasing. Are you saying that in the back half of the year, you could see revenue slowing a bit versus the front half because you're gonna be comparing against some distribution expansion associated with your early shipments at Walmart? Can you just expand on that comment a bit, what you meant there? Regarding these, you know, MVMs or promotions, you know, what are the kind of key considerations that we should be thinking about as you see them today? I know they're not all predictable, but just as you think about kind of quarterly phasing over the course of this year. To clarify, Chris, with the quarters are hard, especially Q2, Q3. As we get into the back half, if you remember in Q4 of last year, we saw shipments above our expectations with a chunk of that going into distributor inventory. Then we also had the Walmart overlap that we'll be coming up to, and that does, you know, result in our estimates that our shipment growth will slow for sure from Q1. How Q2, Q3 fall is a bit harder to call. The, you know, the balance of the year will be, as you would expect, slower than +37%. Oh, okay. All right. We'll see. And then- Yeah. As it relates to, I think you were asking about cadence of major promotions, and I assume you're referring to the major club promotion that moved from April last year into May. Last year, we ran one in July and one in October, which was similar. At this point in time, we're not aware of any sort of changes to that proposed cadence. Until the actual orders come in, we can't guarantee that business is there. Our guidance is based on what we currently know. Okay. All right. Thanks. To follow up on international, is there a way to frame, I guess, where you are in the international growth trajectory? I mean, it appears that a lot of this is being driven by just several countries. How long could these countries continue to deliver the types of growth rates that we're seeing? You know, what's the penetration rate potential? Then just your ability or, you know, capacity or willingness to expand to other markets. Can you just maybe contextualize the international runway for us a bit more between current drivers and where you think the business is going? Thanks. Sure. you know, I think we've said that our goal is for our international businesses to be as large as our America's businesses today. In the investor deck, slide seven, we provide a little bit of context on market size data. I would note, as we said in our remarks, that we are now using Nielsen for our European retail data, and the Nielsen covers a broader range of retailers and is capturing more private label retailers. The category to us now looks larger as we use Nielsen data, while maybe our reported share is lower, not reflecting any change in the market conditions. In that, you'll see that the U.K., you know, has an estimated market size of about $130 million. We're doing the dollar conversion. Germany is only at 53. We've previously shared that on a consumption per head basis, the U.K. is behind the U.S., obviously Germany is behind U.K. I think there is great evidence that there's huge opportunity in Europe to bring the consumption per head up to what we are seeing in the U.S. levels, and to do it across markets. Different markets are at different stages of development. You know, if you had gone into Germany four years ago, for instance, you'd have seen a couple of small brands and some very dominant private label. When a market has very dominant private label, no one's investing in the market for education and growing and promotion. Our belief is those markets are lagging the other markets where brands have been able to play. There's a long runway here. We're very optimistic on international. We're obviously talking about it more on these calls and trying to share information. Exactly how it happens is obviously yet to be determined, but we are trying to drive it and trying to focus on large markets that are, you know, willing to adopt coconut water as their, their favorite beverage, where we can play and be a major player. We prioritize the markets, and we're sequencing it. We're not trying to take on too much, but we're certainly trying to take on more than we have historically. Okay. Thank you. Thank you. Our next question or comment comes from the line of Eric Serotta from Morgan Stanley. Mr. Serotta, your line is open. Great. Thank you. Last quarter, you were fairly explicit in terms of the promotional plans for the second half and essentially giving back some of last year's tariff-driven pricing. Can you give us a little bit of an update there? Are you still looking at pricing potentially being negative in the third quarter or second half, based on your current promo plans? Eric, you know, it's amazing how different the world is from last quarter. We are currently working through the second half retail plans that, you know, it's a different inflationary environment than it was in the second half. The teams are now, you know, working on those plans, and we don't have any changes at this point to our kind of outlook, and our pricing guidance is the same as it was. We'll, as we said, continue to evaluate as we move through the year. I think certainly if the current inflation, you know, looks permanent, right, we will have to take pricing, which is not where we were in February. Great. Just in terms of what you're seeing in terms of inflation on your freight lanes, obviously, you're not shipping coconut water through the straits, but what have you seen in terms of rates on your key lanes from Asia to the U.S. and Brazil to the U.S. and Europe? You mentioned looking to contract more, which would imply that the rates are still pretty attractive, but any color there would be helpful. Base rates, sort of have held pretty firm where they were when we last spoke to you, and they are, you know, pretty attractive, obviously, relative to the last three, four years. Still not at long-term averages, they're at rates that we have, you know, considered sort of locking in some percentage of our business. What we've seen since the recent Middle East escalation has largely been the carriers asking for fuel surcharges, which is on top of the base rates. We haven't seen the base rates move that much, there have been requests for surcharges, which is pretty normal. It reflects maybe a much more normal shipping environment, you know, like as we existed pre-COVID, that there would be fuel surcharges when fuel sort of moved around. Those surcharges are several $100, depending on the lanes. It's manageable within our, you know, guidance, and it's not the material shift in ocean costs that we saw, you know, like in 2022, when, you know, those changes were pretty material. We're pretty comfortable, or very comfortable with our gross margin guidance. The inflationary factors that are perhaps, you know, more significant than that are in energy costs and gasoline costs in our supplying countries, which is affecting their energy costs, their production costs, their workers' costs, and et cetera. There's certainly scarcity of fuel in some of those markets. We haven't seen that affect production yet, but it's something we're monitoring. We're also seeing domestic transportation cost increases, right? At this point, then on the packaging side, we've seen packaging inflation, cost increases taken by the packaging suppliers in response to the cost inflation they're seeing. Certainly we use, you know, Tetra a lot, and that has a relatively high shipping cost component for the inbound. That's sort of what's going on, and that's the bigger driver of the underlying inflation we see, that tends to be a little bit more sticky than energy inflation. That's why we're watching it closely. Great. Thanks so much. I'll pass it on. Thank you. Our next question or comment comes from the line of Eric Des Lauriers from Craig-Hallum Capital Group. Mr. Des Lauriers, your line is open. Great. Thank you for taking my questions and congrats on another very impressive quarter here. On the supply side of things, I know, you know, sourcing coconuts and coconut water has never really been a constraint for you guys. Volumes do keep surprising to the upside. You know, there is accelerating demand sort of above your internal expectations. Could you just give us a bit more color on current outlook for matching inventory supply with the accelerating demands? Is this anything that should be on our radar at this point or no? We're obviously very comfortable with our guidance from a supply perspective. We're comfortable with some potential increase on that from a supply side. I think we indicated in our prepared remarks that we're sort of operating the balance of the year closer to 85%, 90% of available capacity. We would typically try and operate 80%, 85%, so that reflects a step up in utilization of the capacity. We've also pulled the inventory down a little bit in the first quarter, also reflecting, you know, that supported that surge, so to speak. We think with inventory and our current committed capacity, we're in pretty good shape for what we expect to happen on the balance of the year. If that were to accelerate significantly, obviously that would be challenging. As it relates to the long term, we're looking at this and going, "Okay, what does this mean for 2027 and 2028? How do we plan for it?" You know, those discussions have been happening, you know, a long time ago, and we're tweaking up our sort of commitments and/or plans to support what we, you know, could expect if the category continues at this rate. All right, great. That's very, very helpful. I appreciate that. On the private label side of things, so very encouraging to see this, you know, improved outlook. Could you just kind of give us an update on the landscape for private label in the U.S.? Are there other kind of large retailers still remaining that could be significant, you know, wins or I guess, you know, significant contributors to the private label revenues? Can you just give us an update on the sort of competition or competitive environment for bidding on these private label contracts? Thank you. Yeah, there is still some, you know, what I would describe as major retailers, but they're not maybe in the top four retailers that don't have private label. There are still some options in the U.S., and there's still opportunity for private label sort of, you know, re-retail space to be created. Internationally, most of our markets, there's already strong private label presence with a strong private label share, maybe with the exception of the U.K. major grocery, where private label isn't as visible. Private label obviously exists in some of the in the discount channels there, which have relatively significant volume. The environment on the contract side continues to be dynamic. As we said before, when there are disturbances to the cost system, the supply system, that and/or the demand, frankly, you tend to have retailers responding to those disturbances to see if there's a better deal to be had. A better deal might be price or service, particularly if the demand is accelerated and the service levels have been poor. That continues to be a pretty dynamic environment. We're excited with the business that we've won to date, I think, you know, we're more positive that there's potential to diversify our retailer group going forward, so that we diminish our reliance on, you know, one or two key retailers there. I would say the outlook looks very positive. On the demand side, private label is growing faster than the category in the U.S. In Europe, it's sort of growing with the category maybe a little slower because we're gaining some share from a quite a small share base, right? But from a demand side, this appears, at least in the U.S., to be, you know, strong interest in private label, and that is driving both, you know, our sort of share stability, even with our great trends, and also providing consumers, I would guess, the option for coconut water where they're choosing to shop. I think it's more of them choosing to shop in certain channels than anything else. In retailers that have brand and private label side to side year-round, we're not really seeing that effect. That's all very helpful color. I appreciate it and congrats again. Thanks. Thank you. Our next question or comment comes from the line of Kaumil Gajrawala from Jefferies. Mr. Gajrawala, your line is now open. Hey, guys. Good morning, and well done. I guess maybe just digging in a little bit to, you know, this acceleration in growth. It's not that small of a category, and it's putting up, you know, in dollar terms, like very substantial rates of growth. What is there something that, you know, maybe more specific that's changing? Are there entirely new customers that are coming in? Is it something marketing related? Like, if we could just get a few building blocks on what's, sort of what was already a healthy growth rate now, you know, accelerating quite substantially. Trying to understand it a little bit better would be, I think, helpful. I think it's clearly a hydration thing, a need for hydration, a want for hydration from consumers, everyday hydration. It's something we've been talking about. You know, we've talked about for a while how we pull pretty equally from, or historically have pulled pretty equally from sport drinks, premium bottled water and conventional juices. We're seeing an acceleration specifically of how we're pulling from sport drinks. So hydration is clearly, I think one of the drivers of the acceleration of growth that we've been seeing the last couple of quarters, but specifically this quarter. And we seem to be aging down, younger consumers coming into the category. Some of the marketing I think that we're doing and some of the things that are happening organically in social media is driving that. And it comes back to the functionality. It's potassium, it's hydration, it's three and a half times the electrolytes of leading sports drink. We think that all of these things are driving a lot of the acceleration we're seeing specifically with young consumers. Okay, got it. Maybe just following up on that supply question, prior, how are you thinking about the setup for supply for 2027, 2028? Have you sort of maybe fundamentally changed how you're thinking about how much you'll need? Because I guess if things continue at this range, they're, you know, presumably growing at a faster pace than you will have expected. Is it early enough to start making those decisions, or is it something you're just gonna sort of wait out a little longer? I think we've talked about previously how it takes 12 to 18 months to put, you know, new capacity in an existing facility. A new facility might take 18 months to two years if they haven't done coconut water before. That's sort of our planning horizon. We run a three to five year sort of outlook based on our assumptions on growth, and then we try and plan capacity for the next two years to give us a range of outcomes around that while working on the longer-range projects so that they fit in. Projects that come in at a certain capacity and can expand are ideal, so we work on those. So that's how we do the sort of capacity planning. We are also trying to plan that the available capacity is 80%-85% of what we think the demand is, so that gives us some flexibility to deal with underestimating what demand would be. When we see a demand, you know, let's say surge, that immediately goes into those plans and adjusts those efforts. You'll see we've talked about increased personnel costs, we've increased investment in our Singapore team to add capacity more aggressively. This started last year, if not before. We are comfortable that we can meet the demands that we know about today for 2027. Obviously, 2028, we're working on. As we said before, there are plenty of coconuts in the world, and so coconut availability is not an issue, and we're investing in our supply chain to meet this exciting demand we're seeing, and we're comfortable we'll be able to do so. Got it. Thank you. Thank you. Our next question or comment comes from the line of Michael Lavery from Piper Sandler. Mr. Lavery, your line is now open. Thank you. Good morning. Mike? Come back. You mentioned the distributor incentives as a little bit of a headwind to price realization, and I don't feel like it comes up very often. Could you just maybe elaborate a little bit on that dynamic? Is it something new or what's changed there? Sure. With certain distributors at appropriate times, there are, you know, good conversations about how do we move the business forward and close distribution gaps and align incentives across our organizations. You know, we've had some of those conversations over the last three, four years, and with the acceleration of growth, those incentives are starting to sort of play out a little bit, and we're just taking that into account in our revenue planning. We're very pleased with the distribution that's great gains that are happening, where we fit in our distributors' sort of priorities and how they're responding to those incentives. It's all good, and it's basically making sure that we're aligned across all organizations. Okay, that's helpful. Just you've obviously flagged your balance sheet strength and the cash build. Just any thoughts on priorities for how to go spend the money? Well, I think as we said before, our number one priority is supporting the growth, whether that be marketing investments, creating organizational capabilities to support these new markets, or investing in the long-term supply chain capability, whether that be our own capability or potentially partnering with suppliers on investments and/or underwriting them in some way, right? That's the number one priority. Second priority would be sort of innovation. At this point in time, with the strength of the business, perhaps our innovation push is maybe not as, you know, strong as it was prior because we have all the opportunities we have ahead of us, but we still are investing in R&D and product development work and testing on a range of things, so that we can take advantage of opportunities if the occasion was right. I think we said our third priority is M&A, and looking for something that would add significant value to our long-term shareholders. We continue to do that. Obviously, it's a patient look and, you know, we've come close a couple of times, but, you know, we are serious about it. We haven't, you know, pulled the trigger on the final, you know, structures, et cetera, for a number of reasons. We continue to do that. Based on all those things, and I would add sort of inventory management to that as well, given, you know, how inventory can help us deal with seasonality, both on the production side and the demand side. Finally, you know, we sit down and we look at all those factors based on what we think is happening, both from what we expect our cash generation to be over the coming months, then we make decisions as to buyback, with, you know, jointly with the board. You have seen, you know, year to date, we purchased $20 million of shares. We still have $21 million remaining under the authorization. You know, while it's the fourth priority, is one that we're active on when the other activities are well-funded. Okay, great. Thanks. I'll pass it on. Thank you. Our next question or comment comes from the line of Robert Ottenstein from Evercore ISI. Mr. Ottenstein, your line is open. Great. Thank you very much. A couple of follow-ups, if I may. You mentioned that traditionally you pulled equally from sports drinks and juices, and that now kind of the sports, the hydration need is becoming more prominent. I'm just wondering, you know, one, does that change how you and retailers are looking at shelf space and positioning? Two, does that help, you know, perhaps on convenience stores? Maybe talk a little bit about how you are doing on convenience stores. Then my second question is, you know, I understand that, you know, there's plenty of coconuts. Your supply chain is looking good. If the, you know, demand, you know, is higher than expected during, you know, the peak seasons, the, you know, the other side of that is your service levels and your ability to keep the product on the shelf. I was wondering if you can address that as well, if, you know, this demand keeps surging during the high season, you know, your ability to prevent out of stocks. Thank you. Yeah. I think on the first couple questions, positioning the store, regardless, I think, of whether we're, whether we feel, we're pulling more from juice, premium bottled water or sport drinks, we don't like moving around in the store. You've seen, you know, how that's created a problem for us historically. We are in different areas of the store. Some stores we're in the sport drink set, some stores we're in the enhanced water set, some stores we're in the juice set. Moving around creates temporary issues. We like where we're at. Relationships with retailers are very strong as we're, you know, again, fastest growing category in the beverage aisle. We don't wanna move. We think we're well-positioned and well-placed in the store. We want to continue to gain space, expand that billboard at retail, which we've been doing and continue to do. As you think about C store, yes, we see our C store business growing really nicely, not only in terms of velocity, but also in terms of actual ACV. If you look at slide 10 in the investor deck, over the past year, we've grown from 55% ACV to 59% ACV on our core items, on our core item in C store. We want to keep that growing. We think one day there's no reason we shouldn't be in the 80s in C store. Continuing to grow distribution as more and more consumers are buying the product on the go at C store for hydration specifically. As it relates to the supply chain piece and not running out of stock, you know, Martin. Sure. Yeah, yeah. You know, obviously our intention is to never run out of stock. Obviously, that intention is not always fulfilled when demand, you know, drastically, you know, increases above our expectations. By design, we entered the year with, I think, over $100 million of inventory sort of in opposition on the water, which was unusually high. That allowed us to support the first three to four month surge that we've seen, including the movement forward of the major club promotion. You'll see at the end of the quarter that our inventory was down. That partially reflects the very large March that we had. It also partially reflects a little bit of delay in getting some product out of some ports, which is, you know, currently manageable. The product is there, and the ships are coming. There was just a backlog. As we look at the summer, obviously, I can't tell you there won't be service issues because if demand greatly accelerated, there would be, frankly, for everybody in the category. Also with this sort of surge, I think you tend to see other suppliers and even some private label businesses running out of stock, and then you get customers moving to the brands that have stock. It can be a, you know, something that, you know, you don't cause, but it happens because other people are having problems. That said, very comfortable we can support our guidance. Comfortable we could support some volume above our guidance. There's obviously a limit to that, but we're in a very good shape, and we're certainly in much better shape today than we were two years ago, when, if you remember, we entered Q3 with a big inventory constraint and had major service issues in Q3. I don't expect that currently based on what we see, but obviously I can't say never. Terrific. Thank you very much, and congratulations. Thanks. Thank you. Thank you. Our next question or comment comes from the line of Jim Salera from Stephens Inc. Mr. Salera, your line is now open. Hi, guys. Good morning. Thanks for taking our question. Hey, Jim. Martin, I actually wanted to ask a follow-up on your previous answer that you just gave. If we see the demand continue to, you know, be as robust as it's been in 1Q, is there any toggle on the promotional timing such that you might not need them, and that could potentially be a net benefit to gross margin in kind of the, you know, back half of the summer, back half the year? Yeah. difficult one. Obviously, there is. If you've made a commitment to a retailer, pulling that commitment back, you know, is a very awkward conversation, particularly if they feel that you're not pulling back from other retailers, right? Yes, generally you can. Yes, you can moderate entering into new agreements, but commitments that have been made, which tend to be made three, four months out, right, at least, you sort of have to offer to, you know, continue to fulfill. Unless there's a major, major issue that everyone in the industry recognizes and, you know, a major promotion. As an example, in our history, there was one major club promotion that we just said, "Look, you can run it, but it's gonna be horrible, and we think we're better off not running it." Frankly, the retailer was grateful for that input. That isn't always how the conversations go, particularly when they believe that other people might be getting, you know, price support. Difficult conversations can be had. Depends on what's going on in the industry. It's certainly a lever that we would explore to see if it made sense for us and our retail partners. Great. I appreciate the thoughts there. I wanted to ask on the Treats platform. Since that's kind of a unique item that doesn't really neatly fit into a specific category or, you know, subcategory, could you just help us frame up how you think about the potential size of that as part of your portfolio? If you could offer any thoughts on, you know, where that is right now and how you expect the incremental flavor launches to contribute to the year. It's classified as a coconut milk. It's a coconut milk ready to drink. There are some other beverages in that sort of space, Starbucks Pink Drink, ready-to-drink being one. It's currently contributing, I think I said 3% points to our retail, that scans in the U.S. That's pretty good. I think it's fair to say, you know, we launched it in an international market, it didn't stick, it's not a proven success in every market. This goes to how every market is different, we could talk about that at great length. Like, what's working in Germany isn't the same as what's working in the, in the U.K. from a flavor perspective, for instance. I think Treats is interesting. It's currently working to where I think it has a good long-term future within our portfolio. We think we need to have flavor innovation to bring you news to it and find the right flavor additions. The, the, you know, I'm not sure we found the right, you know, flavor portfolio yet, so that will be incremental. I think that's pretty normal in a, you know, flavor-driven category that you work out what works and what doesn't work. Our intention is to do that, and it certainly sits nicely in our space, and I think the retailers that have added the extra SKU and supported it are happy. Great. I appreciate the thoughts. I'll hop back in the queue. Thank you. Our next question or comment comes from the line of John Anderson from William Blair. Mr. Anderson, your line is now open. Hey, guys. This is Glenn West on for John Anderson. Appreciate the question. We hit on a lot, so maybe a quick one. Corey, I know you mentioned the potential for like a $15 million refund from CBP. Do you have any idea on the timeline of those claims or any idea when you expect kind of a decision on that? We're not 100% sure, but the news would indicate 60, 90, you know, 120 days, let's say. We'll see how the process runs. We've submitted to the systems and followed the rules, and we'll see how fast it gets processed and if it's accepted, all those things. Yeah. If it isn't challenged, et cetera. You know, we're in the fight, and we'll see what happens. Awesome. Appreciate it. I'll leave it there. Thanks, guys. Thank you. Thank you. Our next question or comment comes from the line of Gerald Pascarelli from Needham & Company. Mr. Pascarelli, your line is now open. Great. Thank you. Hey, Jerry. Hello. I just had a quick follow-up on capacity utilization. Like in the scenario that demand continues to surge, just thinking about this in the context of your private label business, right? Like you're regaining new business this year that you previously lost. Just again, if demand continued to surge, how would you think about, you know, balancing the split between servicing your branded products and private label this year specifically? I think any color on that would be great. Thank you. Yeah. It's a good question, Gerald, but I think we've said this historically that our goal is to try and provide equal service to everybody, including our brand. You know, obviously, if we were talking about, you know, commitments and bids for, let's say, 2027 business or 2028 business, we take all of these factors into account, and we try not to, you know, commit to business that we feel we're not gonna be able to provide a fair level of service to. You know, these retail relationships and the private label, they're long-term relationships. You know, they need to be treated as partnerships. We need to treat them fairly. We do everything we can to produce to their forecasts. It's fair to say their forecasts aren't always accurate, and you can then run into some difficulties. You know, we have we keep track of that stuff, and we go, "This is what was committed to, and this is what we committed to," and all that sort of stuff. If there's an opportunity to take care of key customers, we will. We do have a pretty long supply chain. I would just remind everybody that what is currently on the water will get, you know, sold in, you know, July, August, or what's being produced this, you know, let's say next month will be sold in August, September. You know, for most of this year, we're sort of almost locked, right? We've still got a few months we can influence. You know, we will do the best we can, and we will try and service every customer in the way that we think is fair to them based on the commitments they've made to us. Appreciate the color. Thanks, Martin. Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to Mr. Martin Roper for any closing remarks. Thanks, Howard. No closing remarks. Thanks, everybody, for joining us for the quarter. We look forward to chatting to you at various events during this quarter, then obviously doing this again, hopefully in three months' time. Everyone, have a great day. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speakers stand by.