The veteran-owned coffee retailer and café chain narrowed its net losses by $9.3m in the third quarter as sustained wholesale revenue growth offset falling DTC and coffee shop sales
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A Black Rifle Coffee Company store in Clarkesville, Tennessee | Photo credit: Black Rifle Coffee
Black Rifle Coffee Company (BRCC) achieved improved profitability in the third quarter after trimming administrative and warehouse expenses.
The veteran-owned coffee retailer and café chain achieved 21% year-on-year gross profit growth in the three months ended 30 September 2024 to reach $41.3m. BRCC also posted a net loss of $1.4m compared to a net loss of $10.7m in the same period last year.
Wholesale – a key growth channel for the business over the last two years – now accounts for 65% of BRCC’s total revenues, with third quarter segment sales increasing 3.5% to $63.7m.
However, total revenues fell 2% year-on-year to $98.2m following respective 11% declines in both its direct-to-consumer and coffee shop segments. BRCC opened one new store in the third quarter to reach 37 sites.
“The Black Rifle brand continues to perform well, and I’m proud of our progress in gaining market share and improving profitability this quarter,” said Chris Mondzelewski, CEO, BRCC.
BRCC’s Chief Financial Officer Steve Kadenacy has outlined a goal for the business to have its coffee products in ‘most major grocery chains by the end of 2025’. BRCC currently has distribution deals with Walmart, Albertsons, Kroger and Meijer.
“Our third-quarter performance showcases our continued focus on improving operational excellence. Our wholesale business continues to gain momentum, laying the foundation for growth across multiple product categories and channels over the coming years,” Kadenacy added.
BRCC expects revenues to increase in the fourth quarter as it launches a new range of ready-to-drink (RTD) beverages. The Black Rifle Energy range will be supported by national distribution from US coffee and soft beverages group Keurig Dr Pepper.
The business expects to achieve full-year revenues of $385m-$415m alongside adjusted EBITDA between $32m-$42m. BRCC reported sales of $395.6m and adjusted EBITDA of $13.3m in 2023.