BRC Inc. Q1 FY2026 earnings call

• Coffee: Disciplined execution in coffee has led to distribution gains, higher volume, better shelf productivity, and improved SKU - level performance. The business is focused on disciplined resource allocation. Operationally, it is becoming more efficient with productivity initiatives contributing to improved margins. - Packaged coffee: Benefits from broad - based strength across customers and formats, share gains, and improved shelf productivity. Execution of the land and expand strategy has led to gains in retail breadth and shelf presence. - Direct - to - consumer: Channel strategy evolution has led to second consecutive quarter of year - over - year growth. Marketplaces scale the model and add incremental reach, while the owned channel focuses on retention. - Ready - to - drink coffee: Despite challenging category trends, expanded distribution. - Energy: Moving to a deliberate phase of expansion. - Community support: Active in initiatives with partners, veterans, and local communities through events and collaborations.

In the coffee segment, packaged coffee showed strong first - quarter growth. There was broad - based strength across customers and formats. Nielsen data indicates Black Rifle Coffee grew 34.6% in the quarter, which is more than two and a half times the category growth rate, driving meaningful share gains. Bagged coffee dollar share increased by 55 basis points to 3.3%, and pods increased by 45 basis points to 2.2% at the end of the quarter. Distribution expanded by approximately seven points of ACV year over year. The direct - to - consumer business had its second consecutive quarter of year - over - year growth, with marketplaces playing a larger role in scaling the model and the owned channel focused on retention. The ready - to - drink coffee segment faced challenging first - quarter trends due to convenience channel softness but still expanded distribution by nearly eight points of ACV year over year. The energy segment reached 21% ACV across more than 22,000 doors in the first quarter and is focused on selective expansion in promising markets and channels.

• Revenue outlook: Increased to at least 8% growth or approximately $430 million. Adjusted EBITDA guidance increased to at least 35% growth or approximately $29 million. - Quarter - to - quarter: Second quarter revenue expected to be at least 10% year - over - year. - Gross margin: Expected to be in the range of 34 - 36% in 2026. Second quarter gross margin expected consistent with first quarter, improving in the back half. Second quarter adjusted EBITDA expected to be at least $5 million.

Q: Mike Baker asked about squaring the revenue guide with the progression through the year.

A: Management stated a disciplined approach to guidance, with the outlook reflecting confirmed in - market pricing and distribution gains. Comps get tougher in the back half due to laps of significant tailwinds like pricing actions, distribution gains, and third - party marketplace acceleration initiatives.

Q: Mike Baker asked about the SKU count spread.

A: Chris Monzaleski mentioned that the average items per door, with some retailers having higher numbers, new retailers start with fewer SKUs, and grocery customers can have as high as 13 or 14 SKUs.

Q: Sarang Vora asked about what's driving the strong product results and about marketing spend.

A: Chris Monzaleski said pods and bags are driving share gains, RTD coffee has potential, and marketing spend has been reallocated, with a ramp - up expected in late Q2 and beyond.

Q: Daniel Bielsi asked about the wholesale growth breakdown and consumer behavior from higher fuel costs.

A: Danny was told wholesale growth was mostly unit growth, pricing was a small part, and no impact of higher fuel costs on consumer behavior was seen yet.