BRC Inc. Reports Mixed Q3 Results with Revenue Decline and Improved Profitability

BRC Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, reflecting a mixed performance in revenue and profitability compared to the previous fiscal period. For the three months ended September 30, 2024, the company generated revenue of $98.2 million, a decrease of 2% from $100.5 million in the same period of 2023. However, for the nine months ended September 30, 2024, revenue increased by 3% to $285.6 million, up from $276.0 million in the prior year.

The decline in quarterly revenue was primarily attributed to a $3.8 million decrease in the Direct to Consumer (DTC) channel and a $0.7 million drop in the Outpost channel, partially offset by a $2.1 million increase in Wholesale revenues. The Wholesale channel's growth was driven by new customer additions and increased distribution in the food, drug, and mass (FDM) market. In contrast, the DTC channel faced challenges due to elevated customer acquisition costs and a strategic shift in advertising, leading to an 11% revenue decline.

Despite the revenue decrease in Q3, BRC Inc. reported a significant improvement in gross profit, which rose to $41.3 million, a 21% increase from $34.1 million in Q3 2023. This improvement was driven by a higher gross margin of 42%, up from 34% year-over-year, attributed to a shift towards higher-margin products and productivity enhancements. Operating income for the quarter was $1.1 million, a turnaround from an operating loss of $7.0 million in the same quarter of the previous year.

For the nine-month period, gross profit also saw a substantial increase, reaching $120.8 million, up 29% from $93.8 million in 2023. Total operating expenses decreased by 13% to $114.8 million, reflecting cost-saving measures, including reductions in general and administrative expenses.

BRC Inc. reported a net loss of $1.4 million for Q3 2024, significantly improved from a net loss of $10.7 million in Q3 2023. For the nine months, the net loss narrowed to $0.9 million from $42.7 million in the prior year. The company’s cash and cash equivalents stood at $7.3 million as of September 30, 2024, down from $12.4 million at the end of 2023.

Strategically, BRC Inc. continues to focus on enhancing brand awareness and customer loyalty through efficient marketing strategies, including national television and social media campaigns. The company is also evaluating its operational strategies, including potential store closures for underperforming locations in the Outpost channel, while planning for future growth through increased investments in the Wholesale channel.