BRC Q3 Revenue Rises 7.3% as Wholesale Growth Lifts Adjusted EBITDA

BRC Inc. (NYSE: BRCC), the owner of Black Rifle Coffee, reported higher fiscal third-quarter 2026 revenue and adjusted EBITDA as wholesale distribution gains and continued direct-to-consumer growth lifted results. The company also reaffirmed its full-year outlook while launching Project Core, a multiyear effort to concentrate resources on coffee, simplify operations and improve profitability.

Net revenue for the quarter rose 7.3% year over year to $108.0 million from $100.7 million. Wholesale revenue increased 8.1% to $72.5 million and accounted for 67.1% of total revenue, compared with 66.6% a year earlier.

Adjusted EBITDA increased 12.3% to $9.5 million from $8.4 million, while the adjusted EBITDA margin widened to 8.8% from 8.4%. BRC attributed the increase to higher adjusted gross profit, partly offset by increased adjusted operating expenses.

Gross margin was 37.1%, up from 36.9% in the prior-year quarter. Tariff recovery and productivity contributed to the improvement, while coffee inflation net of pricing, freight and fuel costs, product mix, and trade spending were offsets. The company said controllable measures—including mix, trade-spending efficiency and productivity—remain part of its longer-term margin strategy, although future coffee costs remain subject to commodity-market volatility.

Distribution and digital channels support growth

BRC said broader retail availability and deeper product assortments continued to support its wholesale business. NielsenIQ data included in the presentation showed Black Rifle Coffee’s packaged-coffee retail sales increased 28.9% over the latest 52 weeks through Sept. 26, compared with 9.7% growth for the broader coffee category. The brand’s bagged-coffee dollar share reached 3.4% in the third quarter, up 1.3 percentage points over two years.

The company’s measured retail distribution reached 58.7% on an all-commodity-volume basis, while the average number of products carried by grocery retailers roughly doubled over two years. Management said further opportunities remain to add retail doors and expand assortments within existing accounts.

Direct-to-consumer revenue grew 8.5%, marking a fourth consecutive quarter of year-over-year growth. Marketplace revenue rose 65% as BRC used third-party digital platforms to reach new shoppers, while BRCC.com remained focused on subscriptions, loyal customers and exclusive products.

In ready-to-drink coffee, BRC was the No. 3 single-serve brand by dollar sales over the latest 52 weeks and had about 53% weighted distribution, according to NielsenIQ data cited by the company. Under Project Core, management plans to focus investment where the brand generates its strongest returns, increase sales velocity within existing distribution and improve channel efficiency.

Project Core narrows operating focus

Project Core is intended to prioritize BRC’s core coffee business and brand while reducing organizational complexity and capital intensity. The company plans to rely on manufacturing partners while retaining control of its brand and product standards. Non-core operations will be required to justify continued investment, be shifted to partners or be exited.

The initiative also calls for coordinated management of pricing, trade spending, product costs and overhead, with capital directed toward the company’s most profitable products and channels. Third-quarter adjusted results excluded certain items associated with Project Core and other activities, including lease-modification costs, asset disposal losses, equity-based compensation and restructuring expenses.

Full-year outlook reaffirmed

For fiscal 2026, BRC continues to expect net revenue growth of at least 8%, implying revenue of at least $430 million, compared with $398.3 million in 2025. The outlook includes approximately $3 million of expected fourth-quarter revenue headwinds from the divestiture of a non-core direct-to-consumer brand and Outpost closures.

The company expects a full-year gross margin of 34% to 36%, compared with 34.6% in 2025. Pricing actions, tariff refunds and productivity initiatives are expected to provide support, while inflation in green coffee, aluminum and co-manufacturing costs, higher fuel and freight expenses, and increased trade and slotting investment are expected to weigh on the result.

Adjusted EBITDA is projected to grow by at least 35% to approximately $29 million or more, versus $21.4 million in 2025. BRC expects revenue growth to increase gross profit dollars, with the gross-margin percentage broadly in line with 2025, while benefits from its 2025 Operational Improvement Plan are expected to reduce selling, general and administrative expenses. The forward-looking adjusted EBITDA measure was not reconciled to GAAP net income because the company said certain components could not be predicted with reasonable certainty.

BRC identified commodity and transportation inflation, tariffs, supply-chain disruptions, dependence on wholesale partners and co-manufacturers, shifts in consumer demand, execution of Project Core, and the challenge of improving Outpost profitability among its principal uncertainties. The company also noted that non-GAAP measures exclude costs and cash requirements that may remain relevant to its overall financial performance.