Results: BRC Reports Second Quarter 2026 Financial Results
BRC Inc. (NYSE: BRCC), the veteran-founded premium coffee and beverage company behind the Black Rifle Coffee brand, reported a strong financial performance for the second quarter of fiscal 2026, driven by robust wholesale expansion, accelerating direct-to-consumer sales, and continued operational improvements. The company posted double-digit revenue growth, improved margins, and significantly higher Adjusted EBITDA while reaffirming its full-year financial outlook.
Management attributed the quarter’s performance to successful execution of strategic priorities established for 2026, including expanding retail distribution, strengthening digital sales channels, improving operational efficiency, and investing in brand-building initiatives tied to America’s upcoming 250th anniversary celebrations.
Wholesale Business Continues to Drive Growth
Black Rifle Coffee generated net revenue of $107.0 million during the second quarter, representing a 12.8% increase from $94.8 million reported during the same period last year.
The company’s Wholesale segment remained the primary growth engine, producing $70.6 million in revenue, up 15.2% from $61.3 million in the second quarter of 2025.
The strong wholesale performance was fueled by expanded retail distribution across grocery, food, and mass merchandise channels. Increased shelf space and broader product availability allowed the company to reach more consumers while driving higher packaged coffee unit sales. Pricing actions implemented during previous quarters also contributed to revenue growth.
The company said its “land-and-expand” strategy continues to gain momentum as Black Rifle Coffee strengthens relationships with retail partners and increases its presence in existing accounts while securing new distribution opportunities.
Direct-to-Consumer Business Posts Fastest Growth in More Than Four Years
The Direct-to-Consumer (DTC) segment also delivered an impressive quarter, with revenue rising 13.6% to $31.4 million, compared with $27.6 million during the same period in 2025.
According to the company, this represents the strongest year-over-year growth rate for the DTC business in more than four years.
Growth was primarily driven by increasing sales through third-party digital marketplaces, reflecting the company’s successful expansion into major e-commerce platforms. These channels helped attract new customers and broaden brand visibility beyond Black Rifle Coffee’s traditional online storefront.
However, subscription revenue remained lower than the prior-year period, partially offsetting marketplace gains.
Meanwhile, the company’s retail coffee shop business, known as Outposts, experienced softer performance during the quarter.
Revenue from company-operated Outposts declined 15.0% to $5.0 million, down from $5.9 million in the second quarter of 2025. The decline reflected lower customer traffic as well as reduced average spending per transaction across company-operated locations.
Leadership Highlights Strategic Progress
Chief Executive Officer Chris Mondzelewski said the company’s second-quarter results demonstrate successful execution of its strategic priorities while reinforcing the strength of Black Rifle Coffee’s core business.
He noted that expanded retail distribution and increased shelf presence continued to support wholesale growth, while the direct-to-consumer segment achieved its strongest growth performance in several years.
Mondzelewski also highlighted the company’s nationwide marketing initiatives surrounding America’s upcoming 250th anniversary. These campaigns, launched earlier this year and expanded throughout the second quarter, are designed to deepen consumer engagement while reinforcing the company’s mission-driven identity.
The initiatives also strengthen Black Rifle Coffee’s longstanding commitment to supporting veterans, active-duty military personnel, first responders, and their families.
Gross Profit and Margins Continue to Improve
BRC continued making progress on profitability despite ongoing inflationary pressures affecting coffee markets.
Gross profit increased 13.4% to $36.5 million, compared with $32.2 million during the second quarter of 2025.
Gross margin improved modestly to 34.1%, up from 33.9% one year earlier.
Several operational improvements contributed to the margin expansion.
Pricing actions helped offset higher input costs, while shipping and fulfillment expenses declined due to productivity improvements implemented through the company’s Operational Improvement Plan. The company also benefited from a reduction in reserves related to excess and obsolete inventory.
These positive factors were partially offset by continued pressure from elevated green coffee prices, tariff-related costs, and higher fees associated with third-party digital marketplaces, which naturally increased as marketplace sales expanded.
Management expects additional gross margin improvement during the second half of 2026 as lower green coffee costs begin flowing through the cost structure.
Marketing Investment Supports Brand Expansion
Marketing expenses increased 7.8% year over year to $10.5 million, compared with $9.8 million during the second quarter of 2025.
Despite the higher spending, marketing became more efficient relative to revenue generation.
Marketing represented 9.8% of revenue during the quarter, compared with 10.3% during the prior-year period.
The increase in marketing investment primarily supported expanded content production, agency partnerships, and collaborative brand initiatives.
These higher investments were partially offset by lower spending on advertising placements and in-store promotional activities.
Management emphasized that revenue growth outpaced marketing expense growth, demonstrating improved operating leverage while continuing to invest in long-term brand development.
Operating Expenses Decline Significantly
One of the quarter’s most encouraging developments was the substantial improvement in operating expenses.
Salaries, wages, and employee benefits declined 2.0% to $15.5 million, compared with $15.8 million in the previous year.
As a percentage of revenue, labor costs improved considerably, falling to 14.5% from 16.7%.
The reduction reflected lower fixed personnel costs following workforce optimization initiatives, although higher performance-based incentive compensation partially offset those savings.
General and administrative expenses showed even greater improvement.
G&A expenses fell 35.2% to $9.3 million, down from $14.3 million one year earlier.
As a percentage of revenue, G&A expenses declined sharply from 15.1% to 8.7%, reflecting significantly lower legal expenses, consulting fees, professional service costs, and depreciation and amortization.
Other operating expenses also improved dramatically.
These expenses declined by 97.7% to just $0.1 million, compared with $4.9 million during the second quarter of 2025.
The significant reduction resulted primarily from the absence of legal contingency charges that negatively affected results during the prior-year period.
Earnings Show Significant Improvement
The combined impact of higher revenue, improved margins, and disciplined cost management translated into a substantial improvement in profitability.
BRC reported a net loss of $0.2 million during the second quarter of 2026, a dramatic improvement from the $14.5 million net loss reported during the same period last year.
Adjusted EBITDA also increased significantly, rising to $6.3 million, compared with $2.4 million in the second quarter of 2025.
The improvement highlights management’s continued focus on enhancing profitability while investing for future growth.
Cash Generation and Operational Efficiency Strengthen
Chief Financial Officer Matt Amigh said the company delivered strong revenue and Adjusted EBITDA growth while continuing to improve cash conversion during the quarter.
He noted that gross margins stabilized throughout the first half of 2026 and are expected to improve further during the remainder of the year as lower green coffee costs begin benefiting production expenses.
Amigh added that ongoing initiatives focused on portfolio optimization, productivity improvements, and operating efficiency are strengthening the company’s financial foundation.
According to management, these structural improvements are enhancing cash generation, improving working capital efficiency, and reinforcing the company’s balance sheet while positioning Black Rifle Coffee for sustainable long-term earnings growth.
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