Grove Collaborative NYSE: GROV said its first-quarter 2026 results came in ahead of internal expectations as the company continued to recover from e-commerce platform disruptions that weighed on performance throughout 2025.
Chief Executive Officer Jeff Yurcisin told investors that the company’s platform disruption is “largely behind us” and that Grove expects the first quarter to represent the revenue trough for the year. The company reported net revenue of $36.2 million, down 16.8% from the prior-year period, and adjusted EBITDA of $0.3 million, marking its second consecutive quarter of positive adjusted EBITDA.
“The cost structure is more efficient, the customer experience is improving, and we are seeing green shoots as it relates to recent cohort behavior,” Yurcisin said. He added that repeat order rates among recent customer cohorts have recovered to levels consistent with those seen before the platform migration.
Revenue Declines, But Margins Improve
Chief Financial Officer Tom Siragusa said the year-over-year revenue decline was primarily due to fewer orders, reflecting a smaller active customer base. He attributed that smaller base to reduced advertising investment in prior periods and customer attrition tied to the 2025 e-commerce platform disruptions.
Direct-to-consumer total orders fell 19.2% year over year to 502,000, while active customers declined 18.5% to 553,000 at quarter-end. However, DTC net revenue per order rose 2% to $67.79. Siragusa said the increase was driven by more targeted promotional strategies, the shift to loyalty-based incentives through Grove Green Rewards and a larger mix of higher-priced items in categories including clean beauty, personal care and wellness.
Gross margin expanded to 54.8%, up 180 basis points from 53% in the first quarter of 2025. Management pointed to Grove Green Rewards as a meaningful contributor, saying the loyalty program has allowed the company to move away from broad discounting and free gifts toward rewards-based incentives.
Yurcisin said the program has helped create “a structural shift” in the company’s promotional strategy, improving gross margin while still giving customers a reason to shop with Grove. In response to an analyst question, he said the primary driver of margin improvement was reduced discounting and different promotional economics, though he also cited better operating efficiency and strength in average order value.
Cost Discipline Supports Second Straight Positive Adjusted EBITDA Quarter
Grove reported a net loss of $1 million, or a 2.8% net loss margin, compared with a net loss of $3.5 million, or an 8.1% net loss margin, in the prior-year period. Adjusted EBITDA improved to positive $0.3 million, or a 0.8% margin, compared with negative $1.6 million, or a negative 3.7% margin, a year earlier.
Operating expenses declined across several categories. Advertising spending was $1.2 million, down 58.6% year over year and in line with fourth-quarter spending levels. Product development expense fell 19.4% to $1.4 million, reflecting lower consulting expenses tied to the e-commerce platform migration and reduced own-brand development. Selling, general and administrative expense declined 17.4% to $18.2 million, driven by the full-quarter benefit of a reduction in force executed in November 2025, lower fulfillment costs from fewer orders and ongoing cost optimization.
Siragusa said the company deliberately reduced advertising to preserve liquidity and drive profitability while the customer experience was stabilized. He said current trends in customer acquisition costs and repeat order rates support gradually increasing advertising investment through the rest of the year.
Mobile App Relaunch and Subscription Improvements Remain Priorities
Yurcisin said the redesigned mobile app, launched in February, was the most visible milestone of the quarter. The company rebuilt a custom application after customer experience issues stemming from its previous third-party approach following the e-commerce migration.
Mobile app orders represent about half of non-autoship orders, and Yurcisin said the app is a primary interface for customers managing subscriptions. He said early feedback has been encouraging, citing five-star app reviews and improved customer engagement signals.
In the question-and-answer session, Alec, speaking on behalf of Susan Anderson of Canaccord Genuity, asked when the app issue was fully resolved. Yurcisin said the relaunch occurred around mid-February, while noting that the company continues to make rolling releases.
Subscriptions remain a key part of Grove’s model. Yurcisin said subscriptions drove 60% of revenue in 2025 and were present in 79% of total orders. He said Grove is focused on building a “world-class subscription experience” and remains committed to delivering a meaningfully improved subscription experience by the time it reports second-quarter results.
Company Raises 2026 Outlook
Grove raised its full-year 2026 guidance following the first-quarter outperformance. The company now expects:
- Net revenue of $142.5 million to $152.5 million, up from a previous range of $140 million to $150 million.
- Adjusted EBITDA of breakeven to positive low single-digit millions, up from approximately breakeven.
Management reiterated that it expects first-quarter revenue to be the lowest quarterly level of the year, with sequential improvement in each remaining quarter.
The company ended the quarter with $10.4 million in cash equivalents and restricted cash, down from $11.8 million at the end of the fourth quarter. Siragusa said the decline primarily reflected cash used in operating and investing activities, including development of the newly launched mobile app. Grove also had $1.7 million available under its asset-based loan facility, up from $1.1 million at the end of the fourth quarter due to an increase in inventory.
Operating cash flow was negative $0.7 million, compared with negative $6.9 million in the prior-year period. Siragusa said the first-quarter cash use primarily reflected working capital needs, including inventory to support operations.
Grove Emphasizes Human Health Positioning
Yurcisin also highlighted Grove’s positioning around clean, sustainable and non-toxic household products. He said the company has more than 10,000 banned or restricted ingredients, including more than 3,000 that are outright banned across every category it carries.
During the quarter, Grove onboarded a chief medical advisor, began establishing a Human Health Advisory Council and started onboarding physician advisors to help translate scientific insights into consumer education, according to Yurcisin. He also pointed to Grove’s collaboration with the Oceanic Preservation Society around “The Plastic Detox,” a Netflix documentary about microplastic exposure, and the launch of the Unplastic Shop, a curated assortment intended to reduce exposure to plastics and endocrine-disrupting chemicals.
Yurcisin said Grove continues to evaluate strategic options that could accelerate its path to scale, strengthen its competitive position or unlock shareholder value. He said any action would be guided by customer focus, capital efficiency and shareholder value creation.
On tariffs, Yurcisin said Grove’s 2026 guidance assumes the continuation of current trade policy. He said the company would pursue any available clawbacks, as other affected brands may do, but did not provide an update that would change guidance.
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.
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