BRCC · BRC Inc.

BRC Inc. reported a strong first quarter for fiscal 2026, with net revenue increasing 21.4% to $109.2 million, driven by robust Wholesale growth of 31.5% and a 7.2% increase in Direct-to-Consumer (DTC) revenue, which marked its strongest quarterly growth in over four years. The Wholesale channel benefited from expanded distribution in packaged coffee across food and mass retailers, while DTC growth was fueled by third-party digital marketplaces. Outpost revenue declined 12.0% due to lower transaction volumes and average order value. Gross margin contracted 305 basis points to 33.0%, pressured by green coffee inflation, tariffs, and a non-cash write-down related to a formulation change, partially offset by pricing actions and productivity gains. Operating expenses improved as a percentage of revenue: marketing expenses fell 330 bps to 9.3%, salaries and benefits decreased 220 bps to 12.9%, and G&A declined 390 bps to 9.2%, reflecting cost discipline and a streamlined structure. Net income improved to approximately breakeven from a $7.8 million loss in the prior year, while Adjusted EBITDA surged to $7.3 million from $0.9 million. Management highlighted growing momentum, a more balanced growth profile, and strong cash generation. Based on year-to-date performance, the company raised its full-year 2026 guidance to at least 8% revenue growth (from at least 7%) and at least 35% Adjusted EBITDA growth (from at least 30%), while maintaining gross margin guidance of 34% to 36%. The balance sheet remains strong, with management focused on driving cash flow through profitability and working capital management.