Key Points
Black Rifle Coffee grew Q1 sales by 21% and achieved GAAP breakeven profitability.
Its retail bagged coffee sales grew by 33% -- nearly tripling the retail coffee industry's average.
Most importantly, BRC continues to sell a broader assortment of products to a growing base of retailers, leading its rejuvanted growth charge.
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Shares of BRC Inc. (Black Rifle Coffee Company) (NYSE: BRCC), a premium coffee company focused on saving the veteran, active military, and first-responder communities, are soaring 24% higher as of 1 p.m. ET time Tuesday. BRC reported first-quarter earnings yesterday afternoon that sailed past analysts' expectations. Sales grew 21%, and the company reached GAAP breakeven profitability, reporting net income of $0.00 for the quarter. Analysts were expecting a loss of $0.01 and revenue growth of only 9%, so its outsize growth helped prompt today's ballooning share price.
While BRC's share price may lead investors to think it is a "penny stock," the company's return to sales growth and improving profitability make it a consumer goods stock worth watching, in my opinion. Over the last year, BRC's retail bagged coffee grew sales by 33%, while the coffee industry grew by 12%. Best yet, despite selling premium-priced coffee, the company's velocity (how quickly its coffee sells) soared to over 101%, meaning it sells more quickly than its cheaper peers -- quite a feat.
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However, the most important development for BRC is that its "all commodity volume" (ACV) has jumped from 26% in 2023 to 55% today. This means that Black Rifle Coffee is sold at stores that account for 55% of total sales in the U.S. Similarly, the average number of items carried by its retail customers has grown from 2 in 2023 to 5.5 today. Simply put, BRC is selling more product types at a growing list of retailers. Best yet, its direct-to-consumer (DTC) segment grew by 7% in Q1, more than doubling the increase in the broader DTC coffee market. This growth shows that its wholesale success isn't cannibalizing its DTC unit.
Guiding for sales to grow by at least 8% in 2026, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to near $30 million, Black Rifle Coffee isn't outrageously priced given its market cap of $272 million and reasonable debt level. While BRC remains a risky bet given its recent shareholder dilution, I'll be watching it closely in 2026.
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Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
