Black Rock Coffee Bar Q3 Earnings Call Highlights

Key Points

• Revenue rose 29.7% to $66.8 million, with same-store sales up 5.8% and comparable-store transactions returning to growth at 2.4%. Management expects fourth-quarter sales and transaction growth to be the strongest of the year.
• Black Rock raised its 2026 store-opening target from 38 to 40 and maintained its outlook for $255 million–$257 million in revenue and $34 million–$35 million in adjusted EBITDA. It continues to target 1,000 stores by 2035.
• Longer operating hours are now permanent at about 70% of stores, and management says they are profitable and support traffic growth. Higher labor costs and more expensive new stores weighed on margins and EBITDA growth, though the company expects fourth-quarter adjusted EBITDA to grow more than 30%.

Black Rock Coffee Bar NASDAQ: BRCB reported a 29.7% increase in third-quarter revenue as customer transactions returned to growth, and the company raised its full-year store opening target while reaffirming its sales and profit outlook.

Revenue rose to $66.8 million, while same-store sales increased 5.8%, up from 4.2% in the second quarter. Transactions at comparable stores grew 2.4%, following declines in the first half of the year, when the company was comparing results against a prior-year loyalty program rollout.

CEO Mark Davis said he expects the fourth quarter to deliver the company’s strongest same-store sales and transaction growth of the year. The chain opened 11 stores during the third quarter and now plans 40 openings for 2026, up from its previous target of 38.

Traffic Growth and Store-Level Costs

The third quarter marked Black Rock’s 15th consecutive quarter of positive same-store sales growth. On a two-year basis, same-store sales rose 16.6% and transactions increased 8.5%. Chief Financial Officer Rodd Booth said pricing contributed 2.4 percentage points to the quarter’s same-store sales growth, while check contributed 1 percentage point.

Store-level profit increased 26.5% to $19.3 million, with a margin of 28.9%. Beverage, food and packaging costs fell by 100 basis points as a share of revenue, but labor costs rose by 110 basis points to 22.1%. Booth attributed the labor increase partly to investments in new store openings and longer afternoon and evening hours.

Adjusted EBITDA rose 22.1% to $8.5 million, growing more slowly than revenue. Davis cited public-company cost comparisons, investments in new stores and labor for extended hours among the reasons. Management expects fourth-quarter adjusted EBITDA growth of more than 30%, outpacing revenue growth.

Booth said fourth-quarter store-level margin would probably look similar to the third quarter’s and that the company expects its full-year margin to be close to the 29.2% recorded in 2025.

Longer Hours and Menu Expansion

Black Rock began extending hours around the end of June and beginning of July. Davis said approximately 70% of stores now operate with the longer hours, which the company has decided to make permanent. He said the additional hours are profitable and have contributed to comparable sales and transaction growth, although he did not quantify their benefit.

The CEO said extended hours attract a younger demographic and that food has benefited from the later trading period. New stores are also opening with extended hours, Davis said.

Food represented 14.2% of the third-quarter mix, while the company’s Fuel platform accounted for 26.3%. Davis said food attachment grew across all dayparts in each quarter of 2026. Recent additions include grilled cheese and cake pops, the latter of which has become a permanent menu item alongside rotating seasonal flavors.

Loyalty accounted for approximately 69% of transactions during the quarter. Davis said the company is also testing a customer data platform to reach guests outside its loyalty program with more personalized offers.

Expansion Plans and Building Costs

Black Rock ended the quarter with 211 stores. Davis said the company had opened 35 stores as of the call, with the remaining openings under its revised 2026 target expected in the following weeks.

The company expects five California openings this year and 15 to 20 in 2027. Davis said an opening in the Inland Empire generated a record-breaking early response. The company continues to target 1,000 stores by 2035.

Booth said the 2026 store class is coming in at approximately $800,000 per store, compared with an average of about $650,000 last year and an initial expectation of $700,000 to $750,000 for this year. He said tenant improvement allowances offset some capital spending and that conversions of existing buildings are helping balance costs, particularly in California.

Full-Year Outlook

Alongside its higher opening target, Black Rock maintained its forecast for 2026 revenue of $255 million to $257 million, mid-single-digit same-store sales growth and adjusted EBITDA of $34 million to $35 million. Booth said the additional stores would contribute little revenue this year because they are opening late in the fourth quarter.

The company expects capital expenditures of $47 million to $48 million inclusive of tenant improvement allowances, or $64 million to $66 million excluding allowances. Booth said approximately $14 million to $15 million of total capital spending supports growth in future years.

Black Rock ended the quarter with $13.6 million in cash, a $19.5 million term loan balance and $4 million drawn on its revolving credit line. Booth said the company had access to $21 million under the revolving facility.

About Black Rock Coffee Bar (NASDAQ:BRCB)

Black Rock Coffee Bar is a specialty coffee company that operates a network of primarily drive-thru coffee shops in the United States. Founded in 2008 and headquartered in Portland, Oregon, the company focuses on convenient service, beverage customization and a digitally connected customer experience. Its menu includes brewed coffee, espresso-based beverages, cold and iced drinks, teas, smoothies and energy drinks, along with a selection of food and snack items. Black Rock also offers branded merchandise and customer loyalty services through its digital platforms.

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