Grove Collaborative (NYSE:GROV) reported second-quarter net revenue of $36.6 million, up 1% sequentially but down 16.9% from a year earlier, as the company continued to focus on profitability, customer experience upgrades and expansion beyond its direct-to-consumer channel.
Chief Executive Officer Jeff Yurcisin said the quarter performed in line with the company’s expectations and followed its forecast that the first quarter would represent the year’s revenue low point. Grove posted adjusted EBITDA of $0.5 million, marking its third consecutive quarter of positive adjusted EBITDA, and generated $1.3 million in operating cash flow.
Revenue Trends and Customer Metrics
Direct-to-consumer revenue declined slightly from the first quarter, while growth in non-DTC channels, including Amazon and QVC, drove the sequential increase in total revenue. Grove said it plans to emphasize Amazon sales as part of its second-half strategy while monitoring whether that channel adds to the business without cannibalizing its DTC platform.
- DTC total orders were 489,000, down 23.6% year over year.
- Active customers totaled 509,000 at quarter-end, down 23.3% from the prior year.
- DTC net revenue per order increased 6.1% year over year to $69.19.
Siragusa attributed the improvement in revenue per order primarily to a greater mix of higher-priced products resulting from category expansion, as well as more efficient promotional spending after the fourth-quarter 2025 launch of the Grove Green Rewards loyalty program. The comparison also benefited from a prior-year test that generated more smaller-value orders and did not recur in the latest quarter.
Profitability and Cash Position
Grove’s gross margin was 53.6%, down 190 basis points from 55.4% a year earlier. The company said the decline was largely due to one-time disposals during the quarter and the absence of a prior-year benefit from selling through previously reserved inventory. Those factors were partially offset by a more targeted promotional strategy.
Operating expenses declined as Grove continued to implement structural cost reductions. Product development expense fell 31.4% year over year to $1.5 million, while selling, general and administrative expense declined 23.2% to $17.6 million. Siragusa cited lower personnel costs, lower fulfillment costs associated with fewer orders, reduced outbound shipping rates following a carrier change, and broader cost-optimization efforts.
The company’s net loss narrowed to $0.9 million, or a 2.5% net loss margin, from a $3.6 million loss, or an 8.2% margin, in the prior-year period. Adjusted EBITDA improved from a loss of $0.9 million a year earlier to positive $0.5 million, representing a 1.3% margin.
Cash equivalents and restricted cash totaled $11.4 million at quarter-end, up from $10.4 million at the end of the first quarter. Grove said positive operating cash flow was driven mainly by lower inventory and non-cash items, partly offset by capitalized spending on e-commerce platform enhancements. Management said it was comfortable that its liquidity could fund its 2026 plan.
Subscription, Assortment and Advertising Plans
During the quarter, Grove launched an updated subscription experience, which Yurcisin described as a key retention and loyalty initiative. Subscriptions are included in more than 80% of Grove orders, according to the company. The revised offering is intended to allow customers to build and adjust a basket of household essentials on their preferred delivery cadence.
Grove also introduced drop-ship capabilities, launching initially with two brands. The program is designed to expand assortment without the inventory ownership costs associated with traditional vendor arrangements. Management said it expects to add larger-format categories over time, including mattresses, air-filtration products and water-purification systems.
Advertising expense was $1.2 million, down 54.6% from a year ago but modestly higher than in the first quarter. Advertising represented 3.4% of revenue, compared with 3.2% in the preceding quarter. Management said it expects to increase advertising spending with discipline in future quarters as it seeks to re-engage lapsed customers and acquire new ones. The company plans to broaden its approach beyond performance marketing to include upper-funnel brand-awareness efforts.
Outlook and CFO Transition
Grove reaffirmed its full-year 2026 outlook for net revenue of $142.5 million to $152.5 million and adjusted EBITDA ranging from break-even to positive low single-digit millions. The company also maintained its expectation for sequential revenue improvement in each of the remaining quarters of 2026.
Yurcisin said Grove’s strategy remains centered on sustainable profitability, balance-sheet strength, revenue growth, and human and environmental health. The company emphasized its product-screening standards, which it said prohibit thousands of ingredients, and pointed to its focus on products positioned around healthier homes.
Siragusa will leave Grove on Aug. 16 to pursue another opportunity. Yurcisin said the company has begun searching for a successor and will provide updates when appropriate.
About Grove Collaborative (NYSE:GROV)
Grove Collaborative is a direct-to-consumer digital marketplace offering a broad assortment of sustainable home and personal care products. Operating as a public benefit corporation, the company provides an online platform designed to simplify the shopping experience for eco-friendly essentials, including cleaning supplies, personal care items, baby and family products, wellness goods and pet care.
The company’s business model centers on a subscription-based delivery service that enables members to schedule regular shipments of both third-party and private-label products.
