Coffee seller BRC Q3 revenue beats on wholesale strength

Overview

• US premium coffee seller's Q3 revenue rose 7.3%, beating analyst expectations

• Adjusted EBITDA grew 12.3% as company benefited from tariff refunds and productivity gains

• Net loss widened on higher impairment and legal costs linked to Project Core restructuring

Outlook

• BRC reaffirms 2026 outlook of at least 8% revenue growth and at least 35% adj EBITDA growth

• Company expects Q4 revenue headwind of about $3 mln from brand divestiture and Outpost closures

• BRC expects 2026 gross margin between 34% and 36%

Result Drivers

• WHOLESALE EXPANSION - Growth in wholesale revenue was driven by expanded distribution of packaged coffee, entry into the dollar channel, and continued gains in grocery, as well as pricing actions

• DTC MARKETPLACES - Direct-to-Consumer revenue increased due to growth through third-party digital retail marketplaces, partly offset by lower subscription revenue and the divestiture of a non-core brand

• GROSS MARGIN GAINS - Gross margin improvement was attributed to pricing actions, approximately $3.5 mln in refunds of previously paid tariffs, and productivity improvements, partly offset by higher coffee and transportation costs

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the food processing peer group is "buy"

• Wall Street's median 12-month price target for BRC Inc is $25.00, about 98.4% above its October 30 closing price of $12.60

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 59 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)