BRC Q1 Earnings Call Highlights

Key Points

• Strong retail and packaged-coffee momentum: Management cited broad-based packaged-coffee strength with Nielsen showing Black Rifle grew 34.6% in Q1, roughly +7 points of ACV distribution year-over-year, and grocery sales that “nearly doubled.”
• Profitability improvement despite margin headwinds: Gross margin fell about 305 basis points to 33% due to one-time items and higher coffee costs, but operating expenses declined >8% and adjusted EBITDA rose from under $1M to over $7M (an eightfold increase).
• Healthy liquidity and raised guidance: The company exited the quarter with about $39M debt, >$52M total liquidity, raised 2026 revenue guidance to at least 8% (~$430M) and adjusted EBITDA to at least 35% (~$29M), with Q2 revenue growth expected at least 10%.

BRC NYSE: BRCC executives pointed to strong first-quarter 2026 results and “meaningful progress against our core growth priorities,” driven largely by distribution gains in packaged coffee, improving shelf productivity, and a continued push to streamline costs and improve profitability.

Chief Executive Officer Chris Mondzelewski said the company is seeing the benefits of its “disciplined execution” at retail, emphasizing that growth is coming not only from adding new doors, but also from expanding shelf presence and improving SKU-level performance. “It’s not just about expanding doors. It is about expanding our shelf presence and making the space we earn more productive,” Mondzelewski said.

Packaged coffee growth and retail execution

Mondzelewski highlighted broad-based strength in packaged coffee across customers and formats, including “strong dollar and unit performance at mass merchants,” grocery sales that “nearly doubled,” and pack-size innovation that supported new distribution in the dollar channel.

According to Nielsen data cited by management, Black Rifle Coffee grew 34.6% in the quarter—more than 2.5 times category growth—while bagged coffee dollar share increased 55 basis points to 3.3% and pods increased 45 basis points to 2.2% by quarter end. The CEO also said grocery bagged coffee unit velocity increased despite higher pricing and expanded shelf presence.

On distribution, Mondzelewski said the company expanded packaged coffee distribution by about seven points of ACV year-over-year and increased assortment within stores, with “the average grocer” carrying nearly two more items than a year ago. He framed the results as validation of the company’s “land and expand” strategy.

In the Q&A, Mondzelewski provided additional detail on SKU counts by retailer, saying new retailers typically start with “two to four SKUs,” often expanding to “six to eight,” while some grocery customers carry “as high as 13 or 14.” He added, “While we sit at five and a half now, there’s no reason that we can’t be at, you know, 12, 13, 14 items on a grocery shelf.”

Direct-to-consumer improvement and marketplace strategy

Mondzelewski said the direct-to-consumer business delivered its second consecutive quarter of year-over-year growth, as marketplaces play a larger role in customer acquisition. He described marketplaces as a way to expand reach and bring in customers, while blackriflecoffee.com remains focused on subscriptions and loyal customers through “deeper engagement, exclusive offerings, and stronger pricing discipline.”

CFO Matthew Amigh reported direct-to-consumer revenue increased 7% year-over-year in the quarter, “driven primarily by increased sales through third-party marketplaces.” He said actions taken over the past year to stabilize the business are translating into more consistent performance and a return to growth.

RTD coffee and energy: distribution gains amid mixed category trends

Management described ready-to-drink coffee as a challenging category in the quarter, with “convenience channel softness” weighing on results. Mondzelewski said distribution still expanded, with ACV up nearly eight points year-over-year, and the company is prioritizing channels and partners with stronger demand while using innovation “as a disciplined growth lever.”

Asked about what is driving performance at mass retail, Mondzelewski said momentum is “very much in coffee,” particularly bagged and pod coffee. He also provided Walmart-specific share metrics, stating the company has a 9.4% share in the bag category and 5.3% share in pods, up 30 basis points in pods.

On RTD innovation, Mondzelewski said cold brew shipments are early and “not yet” a key driver, though the company is “excited about the potential.” He also said Black Rifle views itself as “the number three player in RTD coffee” and “the number 3 cold coffee business in America.”

In energy, Mondzelewski said the business is moving into a more deliberate expansion phase, reaching 21% ACV across more than 22,000 doors in the first quarter, with selective expansion in channels showing early traction.

Margins, cost actions, and earnings leverage

Amigh said first-quarter net revenue increased 21% year-over-year, driven primarily by wholesale and direct-to-consumer. Wholesale revenue grew 31.5% on distribution gains, pricing, and continued contribution from Black Rifle Energy. He said sales to mass merchants increased more than 20% and grocery sales more than doubled.

Gross margin was 33%, down 305 basis points year-over-year, due to “non-recurring items and elevated coffee costs,” according to Amigh. He said the company made progress on controllable levers such as trade efficiency and supply chain improvements, and noted that pricing actions largely offset inflation and tariff impacts, limiting the net effect to about 20 basis points in the quarter.

Amigh detailed several items affecting margin:

• About 100 basis points of costs tied to onboarding a new direct-to-consumer fulfillment provider.
• Roughly 210 basis points from a one-time non-cash write-down tied to coffee extract due to a formulation change (which was not added back to adjusted EBITDA).
• About 50 basis points of benefit from supply chain initiatives and mix.

Operating expenses declined more than 8% year-over-year, driven by a 10% reduction in marketing expense and a 14% decline in general and administrative expense. Despite the lower gross margin rate, revenue growth drove higher gross profit dollars and, combined with operating expense reductions, resulted in an “eightfold increase” in adjusted EBITDA, Amigh said. Adjusted EBITDA increased from under $1 million to over $7 million year-over-year, with adjusted EBITDA margin expanding 570 basis points.

Balance sheet, cash flow, and updated outlook

Amigh said the company ended the quarter with $39 million of debt outstanding—approximately 1x net debt to trailing twelve-month adjusted EBITDA—and more than $52 million of total liquidity, including cash and available capacity under its credit facility. Free cash flow improved by about $11 million year-over-year, with $6 million generated in the first quarter compared to a use of more than $5 million in the prior-year period, driven by improved profitability and working capital management.

Amigh also referenced an NYSE notice received in February regarding the minimum price requirement. He said shares were trading above $1 and that compliance would be regained if, at the end of the measurement period, both the closing share price and the average closing price over the prior 30 trading days are at least $1.

For 2026, the company raised its outlook to at least 8% revenue growth, or approximately $430 million, and increased adjusted EBITDA guidance to at least 35% growth, or approximately $29 million, up from a prior outlook of at least 30% growth. Amigh said guidance reflects “only what we have confirmed at this point,” including in-market pricing and secured distribution gains, without assuming incremental wins not yet realized.

On quarterly cadence, Amigh said first-quarter performance exceeded internal expectations, in part due to shipment timing that likely benefited revenue by a few million dollars and is expected to normalize in the second quarter. The company expects second-quarter revenue growth of at least 10% year-over-year, compared with 21% in the first quarter.

Gross margin for 2026 is expected in the 34% to 36% range, with second-quarter margin expected to be consistent with the first quarter due to continued coffee inflation pressure and “the more recent impact of higher fuel costs.” Amigh said gross margins should improve in the back half as higher-cost inventory is worked through and productivity and mix benefits build.

For the second quarter, the company expects adjusted EBITDA of at least $5 million, “more than double” the prior-year period, with adjusted EBITDA expected to step up further in the second half as revenue builds and operating leverage increases. While not providing formal cash-flow guidance, Amigh said the company expects to generate positive cash flow with capital expenditures in line with prior-year levels.

In closing remarks, Mondzelewski said fundamentals are strengthening as growth becomes “increasingly driven by distribution gains, improved shelf productivity…and unit velocity,” and that the company is “converting revenue into earnings more effectively than we have before, and we are generating positive cash flow.”

About BRC NYSE: BRCC

Black Rifle Coffee Company, Inc is a veteran-owned specialty coffee roaster and retailer that offers a range of coffee products, merchandise and subscription services. The company sources, roasts and distributes its own blends and single-origin coffees, as well as ready-to-drink beverages and branded apparel. Its product lineup includes whole-bean and ground coffees, cold brew concentrates, K-cup pods and limited-edition small-batch offerings designed to appeal to active lifestyle and patriotic consumers.

Founded in 2014 by U.S.

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