BRC Inc., (BRCC) the parent of coffee retailer and coffee-bar operator Black Rifle Coffee, swung to a fourth-quarter loss from a year-earlier profit as inflation lifted costs of production and shipping, among other factors.
For all of 2022, Black Rifle boosted its revenue outlook and said it would add 15 to 20 new stores to the 16 it had at year-end.
And the company's co-chief executive, Tom Davin, said on the earnings conference call that demand for the company's coffee is such that Black Rifle "is in advanced discussions with several co-manufacturers that will enable us to more fully address" unmet product demand.
The Salt Lake City company, which says it was founded to support veterans, active-duty military, first responders and average coffee consumers, reported a loss of $4.6 million compared with net income of $976,000 in the year-earlier quarter.
Revenue jumped 20% to $71.8 million from $59.9 million.
BRC went public on Feb. 10 in a merger with a special purpose acquisition company. The SPAC price was $10 a share.
The shares at last check rose 1.5% to $16.34. The stock has traded as low as $9.10 a share, on Feb. 2 and as high as $22.80, on Feb. 17.
Black Rifle Stock Skyrockets in First Day of Trading
A Mission-Driven Operation
“Growing customer enthusiasm for our coffee and mission continues to drive strong results as we increase brand awareness," Black Rifle Founder and Chief Executive Evan Hafer said in a statement.
"People overwhelmingly want to buy from companies who share their values, and BRCC’s mission is one everyone can get behind.”
Gross-profit margin narrowed to 34.3% from 40%. The company made clear that the product and shipping costs hadn't yet reflected price increases.
Also hurting gross-profit margin: a shift in product mix from wider-margin direct-to-consumer sales to the wholesale channel, which is mainly its sales of ready-to-drink products.
Black Rifle Coffee
The company spent 5.8% more on marketing to boost its profile with consumers, but the $11.1 million it spent in the latest period fell as a percentage of total revenue.
For all of 2022, Black Rifle now sees total revenue of $315 million, up from an earlier estimate of $311 million. At year's end the company operated eight company-owned and eight franchised outlets.
Prior to the report, four Wall Street analysts were largely positive on the stock.
Three have buy ratings: Raymond James' Joseph Altobello rates the stock outperform with a $21 price target.
William Blair's Sharon Zackfia and Matthew Curtis peg it outperform with no target.
DA Davidson's Michael Baker calls it a buy with a $16 target. His price target is up $2 from a Dec. 28 initiation on the stock.
And Truist's Bill Chappell is a bit more conservative with his hold rating but puts up a higher-end price target of $20.
Black Rifle Coffee Going Public Via SPAC Merger
SPACs, or blank-check companies, are formed for the express purpose of finding and merging with an operating partner. The idea is to speed the operating company to the public markets and avoid the extended process of a traditional initial public offering.
