Grove Collaborative, which offers a range of sustainable household and personal care items, faces delisting on the New York Stock Exchange (NYSE) if its share price doesn’t rise within six months. The NYSE, which alerted Grove about the problem in a Dec. 14, 2022 Securities and Exchange Commission filing, requires companies to maintain a share price of at least $1 over a consecutive 30-day period to remove the delisting threat. At press time, Grove Collaborative shares were trading at 22 cents.
The company, which has pledged to become plastic-free by 2025, went public after its June 2022 acquisition by a special holding company owned by Virgin Group. The purchase was accompanied by an $86 million PIPE (private investment in public equity) investment from an affiliate of the holding company’s sponsor, along with new and existing Grove investors.
Grove’s most recent financial results, for the quarter that ended Sept. 30, 2022, showed net revenue of $77.7 million, down 2% from the same period the previous year and down 18% year-over-year. When the Q3 results were reported in November, CEO Stuart Landesberg cited as positive news the company’s halving of its adjusted EBITDA margin loss during Q3: it was -12.4%, compared to -26.6% in Q2 2022 and -32.8% during the same period the previous year. In fact, at the time the company upgraded its financial guidance for the full year, projecting net revenue in the $313 million to $320 million range, up from the $302.5 million to $312.5 million that had been forecast earlier in the year.
Other than its underperforming stock, Grove has had a strong year: Drew Barrymore joined Grove Collaborative as a Sustainability Advocate and invested in the company in April 2022, and in July 2022 Grove expanded its retail presence with deals to put its products on shelves at Meijer, Kohl’s and Giant Eagle. Grove also more than doubled its assortment at Target, where the company’s offerings have been available since 2021.
Nor is Grove the only retailer dealing with depressed stock prices: Party City received a delisting notification earlier in December as well. Like that company, Grove’s stock will continue to trade during the six-month probationary period, but with the letters “.BC” following its GROV symbol to indicate that it is “below compliance.”
