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Black Rifle Coffee cut its losses and enjoyed brisk launch of energy drink line in partnership with KDP but shares still tumbled over 15% in trading today in down market as topline eroded in Q4. In Q4 revenues dipped 12% to $105.9 mil, tho erosion was smaller when non-comparable items like barter of excess inventory for media buys are excluded. Gross margin jumped nearly 12 pts to 38.7% from 26.5% as co's efficiency drive continued. Operating loss narrowed to $2.2 mil from $12.2 mil. For full year revenues were off 1% to $391.5 mil. BRC operated in black, with $3.8 mil net profit, reversing $50.2 mil loss a year earlier. For 2025, BRC is anticipating just 1-9% revenue growth to $395-425 mil range as it gets energy launched and cycles $30.4 mil in barter revenue with growth anticipated to accelerate in following 2 years. Cash flow should be in the black via $20-30 mil EBITDA despite anticipated $9-10 mil hit from soaring prices for green coffee, 2.5-pt margin hit. That's despite considerable cushion BRC derived by locking in 95% of its anticipated 2025 coffee bean volume contractually. No word on price hikes, as co aims to operate in "disciplined" fashion, CEO Chris Mondzelewski told questioner this morning. He later reminded another question that in coffee segment Black Rifle is "more of a follower than a leader" and will follow what leaders do.Recall that BRC started as veteran-operated coffee roaster that built out spectacular DTC biz before surprising investors with a sharp pivot to CPG sector, starting with bagged and pod coffees in Walmart and adding RTDs. It also paused expansion of caf&eacute; network dubbed Outposts, taking impairment charge in Q4 for overaggressive buildout of some underperforming stores.In barely 3 years its canned coffees have won #3 spot in segment behind only Pepsi/Starbucks Frappuccino and Monster, as Monz said today, but with only half rivals' market presence: line boasts 47.2 ACV and 4.6% share in AOC + convenience channel. No discussion today of whether its separate line of RTD coffees moving thru indy channel, mainly beer houses, are destined to follow the energy drinks to KDP, tho focus for now clearly is on staged energy launch at time that RTD coffee sector has softened. The energy entries crept into some mass retailers in Q4 and have been moving into more crucial C&G channel in current period, thanks to Keurig Dr Pepper's distribution might. It's in portfolio that also includes C4, Bloom and Ghost.By now that wholesale channel, including the RTDs, is driving the biz. In Q4, it fell 8.6% to $67.2 mil in sales, tho ACV advanced to 48.6% from 37.1% a year earlier in food/drug/mass while the later-arriving RTDs specifically advanced their ACV to 47.2% from 43.4%. DTC biz with which BRC started plunged 17.8% to $32.2 mil as co prioritizes subscribers over one-time purchasers and aims to migrate its loyalists to retail channel. Its subscriber base exceeded 190K members and their avg order value rose 5%. As for the Outposts, they dropped 7.4% to $6.5 mil at 37 locations, up just 1 from 2024.Energy in 7K Stores Ahead of Formal Launch Timetable Like many other bevcos, BRC has looked longingly to energy segment as way to juice growth, despite its great success with coffee RTDs. As CEO Mondzelewski reminded shareholders this morning, US energy biz is $20 bil large, vs $12 bil for packaged coffee and $4 bil for RTD coffee. So co forged deal with KDP that saw line go from concept to commercialization in just 6 mos, with first cans going out the door in Dec and hitting retail last month. In that first month, Black Rifle Energy has won 17% ACV, nearly 7,000 stores, thanks to efforts by new strategic partner, with Walmart apparently among partners to bring on the brand early. "Well ahead of expectations in distribution in Q1," Monz said. Buildout plan calls for energy line to attack 12 priority markets in first year, pursuing 2-year rollout plan before brand is universally available. Those 12 markets will be blitzed in late Mar/early Apr as c-store resets occur.Walmart Slows but Still Solid Recall that Walmart - referred to on call only as oldest partner or biggest partner - was launch partner for CPG push, starting with bags and pods. Tho it does over $110 mil in sales, it has flattened a bit, as questioner noted on call this morning. But CEO professed himself "thrilled with continued progress" there, saying some flattening was expected as rest of market expanded. He took heart from fact that ground coffee and pods didn't decline there, where it remains #4 bagged brand, #6 pod brand. Partners are in conversations about innovation for 2H that might add a lift.After Rolling Up Sleeves, CFO Kadenacy Ready to Move On On call this morning, CFO Steve Kadenacy said he'll be transitioning out of day-to-day to board seat in coming months as co seeks a permanent successor after accomplishing his aim of getting BRC on more solid financial footing. He'd been early investor who'd helped with co's public move before stepping into the breach 18 months ago to enhance financial discipline as Wall Street began to insist on profitable growth. Kadenacy "rolled up the sleeves and put us in a really strong position," as Monz praised his colleague.

Black Rifle Bullish on Energy Launch as Revenues Soften in Wholesale, DTC, Café Segments; Shares Slump

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