BRC Inc.
For the period ended Jun 30, 2026. Filed Aug 3, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 3, 2026
BRCC$9.66-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-04.
0001891101-26-000028
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-03.
0001891101-26-000039
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 80 previous paragraphs and 82 current paragraphs.
46 unchanged; 18 reworded; 14 added; 16 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
The following table summarizes our results of operations for the periods indicated (dollars in thousands, unaudited):
Current report
Net revenue for the three months ended June 30, 2026 increased $12.2 million, or 13%, to $107.0 million as compared to $94.8 million for the corresponding period in 2025.
Current report
Net revenue for our Outpost channel for the three months ended June 30, 2026, decreased $0.9 million, or 15%, to $5.0 million as compared to $5.9 million for the corresponding period in 2025. The decrease was primarily driven by a decline in transactions and average order value at Company-operated Outposts.
Current report
Cost of goods sold for the three months ended June 30, 2026 increased $7.9 million, or 13%, to $70.5 million as compared to $62.7 million for the corresponding period in 2025. Gross margin increased modestly to 34.1% for the three months ended June 30, 2026 compared to 33.9% for the corresponding period in 2025. The improvement in gross margin was primarily attributable to pricing actions, lower shipping and fulfillment costs driven by productivity gains, and changes in the reserve for excess and obsolete inventory compared to the prior year, which was partially offset by higher green coffee input costs and tariffs, as well as higher third-party e-commerce marketplace fees, which increased in line with the revenue growth in these channels.
Current report
Marketing and advertising expenses for the three months ended June 30, 2026 increased $0.8 million, or 8%, to $10.5 million as compared to $9.8 million for the corresponding period in 2025. The increase was primarily driven by higher spending on content production and media, agency, and partnerships, which was partially offset by lower ad placement and in-store marketing costs. As a percentage of revenue, marketing and advertising expense decreased to 9.8% for the three months ended June 30, 2026 from 10.3% for the corresponding period in 2025, as revenue growth outpaced the increase in marketing investment.
Current report
Salaries, wages, and benefits expenses for the three months ended June 30, 2026 decreased $0.3 million, or 2%, to $15.5 million as compared to $15.8 million for the corresponding period in 2025. This decrease was primarily attributable to lower severance costs and reduced payroll from the lower headcount as a result of our Operational Improvement Plan, partly offset by higher bonus and stock-based compensation expense in the current period. As a percentage of revenue, salaries, wages, and benefits expense decreased to 14.5% for the three months ended June 30, 2026 from 16.7% for the corresponding period in 2025, reflecting both lower spend and revenue growth.
Current report
General and administrative expenses for the three months ended June 30, 2026 decreased $5.0 million, or 35%, to $9.3 million as compared to $14.3 million for the corresponding period in 2025. The decrease was primarily attributable to lower legal fees, lower consulting and professional fees, and reduced depreciation and amortization expense as certain assets became fully depreciated, reflecting actions taken to simplify and rationalize the Company's cost structure. As a percentage of revenue, general and administrative expense decreased to 8.7% for the three months ended June 30, 2026 from 15.1% for the corresponding period in 2025.
Current report
Other operating expense, net for the three months ended June 30, 2026 decreased approximately $4.8 million, or 98%, to $0.1 million as compared to $4.9 million for the corresponding period in 2025. The decrease was primarily due to the absence of legal contingency charges as compared to the corresponding period of 2025.
Current report
Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025
Current report
The following table summarizes our results of operations for the periods indicated (dollars in thousands, unaudited):
Current report
Net revenue for the six months ended June 30, 2026 increased $31.4 million, or 17%, to $216.2 million as compared to $184.8 million for the corresponding period in 2025.
Current report
Net revenue for our Wholesale channel for the six months ended June 30, 2026, increased $27.2 million, or 23%, to $145.3 million as compared to $118.1 million for the corresponding period in 2025. The increase was primarily driven by expanded packaged coffee distribution, SKU expansion at FDM retailers, and pricing.
Current report
Net revenue for our Outpost channel for the six months ended June 30, 2026, decreased $1.5 million, or 14%, to $9.8 million as compared to $11.3 million for the corresponding period in 2025. The decrease was primarily driven by a decline in transactions and average order value at Company-operated Outposts.
Current report
Marketing and advertising expenses for the six months ended June 30, 2026 decreased $0.4 million, or 2%, to $20.7 million as compared to $21.1 million for the corresponding period in 2025. Marketing and advertising expense also decreased to 9.6% of net revenue for the six months ended June 30, 2026 from 11.4% for the corresponding period in 2025. This decrease was primarily driven by lower spending on ad placement and in-store marketing, which was partially offset by higher content production and media investment.
Removed paragraphs (16)
Previous report
Revenue, net
Previous report
Cost of goods sold
Previous report
Operating expenses
Previous report
Interest expense
Previous report
Components of Our Operating Income (Loss)
Previous report
The following table summarizes our revenue, gross profit, gross margin, and total operating expenses (dollars in thousands, unaudited):
Previous report
Revenue, net
Previous report
Net revenue for the three months ended March 31, 2026 increased $19.3 million, or 21%, to $109.2 million as compared to $90.0 million for the corresponding period in 2025.
Previous report
Net revenue for our Outpost channel for the three months ended March 31, 2026, decreased $0.7 million, or 12%, to $4.8 million as compared to $5.5 million for the corresponding period in 2025. The decrease was primarily driven by softness in volume and average order values.
Previous report
Cost of goods sold
Previous report
Operating expenses
Previous report
Total operating expenses for the three months ended March 31, 2026 decreased $3.1 million, or 8%, to $34.8 million as compared to $37.9 million for the corresponding period in 2025.
Previous report
The following table summarizes operating expenses for the periods indicated (dollars in thousands, unaudited):
Previous report
Marketing and advertising expenses for the three months ended March 31, 2026 decreased $1.1 million, or 10%, to $10.2 million as compared to $11.3 million for the corresponding period in 2025. This decrease reflects improved allocation of marketing resources, with reduced spending on media, in-store marketing, and agency costs.
Previous report
Interest expense, net
Previous report
On July 18, 2025, we closed a public offering and issued 28,000,000 shares of Class A Common Stock and an additional 4,200,000 shares of Class A Common Stock as a result of the full exercise of the underwriter's option, for total net proceeds of $37.3 million.
Reworded paragraphs (18)
Previous wording
•DTC channel revenue has grown as we continue to optimize customer acquisition, enhance retention, and provide our customers with a personalized and engaging shopping experience through targeted content and tailored product offerings on our website. Additionally, we are increasing our investment in major third-party ecommerce marketplaces in response to changing consumer purchasing behavior.
Current wording
•DTC channel revenue has grown as we continue to optimize customer acquisition, enhance retention, and provide our customers with a personalized and engaging shopping experience through targeted content and tailored product offerings on our website. Additionally, we are increasing our investment in major third-party e-commerce marketplaces in response to changing consumer purchasing behavior.
Previous wording
During the second quarter of 2025, management implemented the Operational Improvement Plan to reduce costs and improve the efficiency of certain company-wide functions. This plan was extended in the third quarter of 2025 as a result of the relocation of our corporate headquarters and a change in our third-party logistics provider. The cost of this plan was approximately $6.6 million consisting of severance and transition costs, substantially all of which have been incurred as of March 31, 2026. We estimate that the costs savings as a result of this plan will exceed $11.4 million on an annualized run rate basis. As of March 31, 2026, we have realized approximately $8.4 million of these savings.
Current wording
During the second quarter of 2025, we implemented the Operational Improvement Plan to reduce costs and improve the efficiency of certain company-wide functions. This plan was extended in the third quarter of 2025 as a result of the relocation of our corporate headquarters and a change in our third-party logistics provider. The cost of this plan was approximately $6.8 million consisting of severance and transition costs, substantially all of which have been incurred as of June 30, 2026. We estimate that the costs savings as a result of this plan will exceed $12.2 million on an annualized run rate basis. As of June 30, 2026, we have realized approximately $10.4 million of these savings.
Previous wording
Interest expense consists of interest on our borrowing arrangements, the amortization of debt discounts, and deferred financing costs.
Current wording
Interest expense, net consists of interest on our borrowing arrangements, the amortization of debt discounts, and deferred financing costs.
Previous wording
This discussion and analysis pertains to comparisons of material changes on the consolidated financial statements for three months ended March 31, 2026 and 2025. The following table represents the selected results of operations for BRC Inc. for the periods indicated (dollars in thousands, unaudited):
Current wording
This discussion and analysis pertains to comparisons of material changes on the consolidated financial statements for three and six months ended June 30, 2026 and 2025.
Previous wording
(1)Gross margin is calculated as gross profit as percentage of revenue, net.
Current wording
(1) Gross margin is calculated as gross profit as percentage of revenue, net.
Previous wording
Net revenue for our Wholesale channel for the three months ended March 31, 2026, increased $17.9 million, or 32%, to $74.7 million as compared to $56.8 million for the corresponding period in 2025. The increase was primarily driven by expanded packaged coffee distribution and SKU expansion at FDM retailers, as well as contributions from Black Rifle Energy.
Current wording
Net revenue for our Wholesale channel for the three months ended June 30, 2026, increased $9.3 million, or 15%, to $70.6 million as compared to $61.3 million for the corresponding period in 2025. The increase was primarily driven by expanded packaged coffee distribution, SKU expansion at FDM retailers, and pricing.
Previous wording
Interest expense, net for the three months ended March 31, 2026 decreased approximately $1.1 million, or 48%, to $1.2 million as compared to $2.4 million for the corresponding period in 2025. The decrease was primarily driven by a lower average outstanding balance of the ABL Facility during the first quarter of 2026 compared to the corresponding period in 2025.
Current wording
Interest expense, net for the three months ended June 30, 2026 decreased approximately $0.6 million, or 32%, to $1.3 million as compared to $1.8 million for the corresponding period in 2025. The decrease was primarily driven by a lower average outstanding balance of the ABL Facility during the second quarter of 2026 compared to the corresponding period in 2025.
Previous wording
Net revenue for our DTC channel for the three months ended March 31, 2026 increased $2.0 million, or 7%, to $29.7 million as compared to $27.7 million for the corresponding period in 2025. The increase was primarily driven by growth at third-party digital marketplaces, which was partially offset by declines in subscription and non-subscription revenue. The decrease in subscription and non-subscription revenue was driven in part by a shift in customer purchasing behavior toward third-party digital marketplaces, reflecting channel mix changes rather than underlying demand softness.
Current wording
Net revenue for our DTC channel for the six months ended June 30, 2026 increased $5.8 million, or 10%, to $61.1 million as compared to $55.4 million for the corresponding period in 2025. The increase was primarily driven by growth at third-party digital marketplaces, which was partially offset by declines in subscription and non-subscription revenue.
Previous wording
Cost of goods sold for the three months ended March 31, 2026 increased $15.6 million, or 27%, to $73.1 million as compared to $57.5 million for the corresponding period in 2025. Gross margin decreased to 33% for the three months ended March 31, 2026 as compared to 36% for the corresponding period in 2025. The decrease in gross margin was primarily attributable to higher costs, driven by inflation. Gross margin was further impacted by an increase in the reserve for excess and obsolete inventory. These decreases were partially offset by pricing actions and productivity gains.
Current wording
Cost of goods sold for the six months ended June 30, 2026 increased $23.5 million, or 20%, to $143.7 million as compared to $120.2 million for the corresponding period in 2025. Gross margin decreased to 34% for the six months ended June 30, 2026 as compared to 35% for the corresponding period in 2025. The decrease in gross margin was primarily attributable to higher costs driven by inflation and tariffs, which was partially offset by pricing actions, productivity gains from the Operational Improvement Plan, and changes in the reserve for excess and obsolete inventory compared to the prior year.
Previous wording
Salaries, wages and benefits expenses for the three months ended March 31, 2026 increased $0.5 million, or 4%, to $14.1 million as compared to $13.6 million for the corresponding period in 2025. This increase was primarily attributable to higher bonus expense in the current period. This increase was partially offset by lower payroll costs driven by a reduction in headcount year over year as a result of our Operational Improvement Plan.
Current wording
Salaries, wages, and benefits expenses for the six months ended June 30, 2026 increased $0.2 million, or 1%, to $29.6 million as compared to $29.4 million for the corresponding period in 2025. As a percentage of revenue, salaries, wages, and benefits expense decreased to 13.7% from 15.9% for the corresponding period in 2025. This increase was primarily attributable to higher bonus and stock-based compensation expense in the current period, largely offset by lower payroll costs from reduced headcount as a result of our Operational Improvement Plan and lower severance costs compared to the corresponding period in 2025.
Previous wording
General and administrative expenses for the three months ended March 31, 2026 decreased $1.7 million, or 14%, to $10.1 million as compared to $11.8 million for the corresponding period in 2025. This decrease reflects actions taken to simplify and rationalize the Company's cost structure.
Current wording
General and administrative expenses for the six months ended June 30, 2026 decreased $6.7 million, or 26%, to $19.4 million as compared to $26.1 million for the corresponding period in 2025. This decrease reflects actions taken to simplify and rationalize the Company's cost structure, including lower legal fees, lower consulting and professional fees, as well as lower depreciation and amortization expense driven by certain assets becoming fully depreciated. As a percentage of revenue, general and administrative expense decreased to 9.0% for the six months ended June 30, 2026 from 14.1% for the corresponding period in 2025.
Previous wording
Other operating expense, net for the three months ended March 31, 2026 decreased approximately $0.9 million, or 69%, to $0.4 million as compared to $1.2 million for the corresponding period in 2025. The decrease was primarily related to a lease termination that was recorded in the first quarter of 2025.
Current wording
Other operating expense, net for the six months ended June 30, 2026 decreased approximately $5.7 million, or 92%, to $0.5 million as compared to $6.2 million for the corresponding period in 2025. The decrease was primarily related to the absence of legal contingency charges recorded in the corresponding period in 2025, as well as a prior-year loss on the disposal of terminated Outpost sites which declined significantly in the current period.
Previous wording
Our primary sources of cash are (1) cash on hand, (2) cash provided by operating activities, and (3) net borrowings from our credit facilities. As of March 31, 2026, our cash and cash equivalents were approximately $10.0 million, our working capital was $29.6 million, and under our credit facilities, we had $52.5 million of available borrowings. Our ability to draw from the credit facilities is subject to a borrowing base and other covenants. As of March 31, 2026, we are in compliance with our covenants under the credit facilities, and there are no defaults or events of default. We believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business and under the current market conditions for at least the next twelve months.
Current wording
Our primary sources of cash are (1) cash on hand, (2) cash provided by operating activities, and (3) net borrowings from our credit facilities. As of June 30, 2026, our cash and cash equivalents were approximately $12.0 million, our working capital was $30.8 million, and under our credit facilities, we had $50.4 million of available borrowings. Our ability to draw from the credit facilities is subject to a borrowing base and other covenants. As of June 30, 2026, we are in compliance with our covenants under the credit facilities, and there are no defaults or events of default. We believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business and under the current market conditions for at least the next twelve months.
Previous wording
Net cash provided by operating activities was $6.8 million for the three months ended March 31, 2026, compared to net cash used in operating activities of $4.1 million for the corresponding period in 2025. The total increase of $10.9 million in net cash provided by operating activities was primarily due to increased net income and working capital improvements.
Current wording
Net cash provided by operating activities was $12.6 million for the six months ended June 30, 2026, compared to net cash used in operating activities of $7.5 million for the corresponding period in 2025. The total increase of $20.1 million in net cash provided by operating activities was primarily due to increased net income and working capital improvements.
Previous wording
Net cash used in investing activities was $0.6 million for the three months ended March 31, 2026, compared to net cash used in investing activities of $1.2 million for the corresponding period in 2025. The $0.5 million decrease in net cash used in investing activities was primarily due to lower capital expenditures, including reduced investment in our Outpost locations, roasting facilities, and information technology.
Current wording
Net cash used in investing activities was $1.1 million for the six months ended June 30, 2026, compared to net cash used in investing activities of $2.1 million for the corresponding period in 2025. The $1.1 million decrease in net cash used in investing activities was primarily due to lower capital expenditures, including reduced investment in our Outpost locations, roasting facilities, and information technology.
Previous wording
Net cash used in financing activities was $0.5 million for the three months ended March 31, 2026, compared to net cash provided by financing activities of $2.4 million for the corresponding period in 2025. The $2.9 million decrease in net cash provided by financing activities was primarily due to $2.7 million of net proceeds from long-term debt, primarily related to draws on our ABL Facility, in the prior year period.
Current wording
Net cash used in financing activities was $3.9 million for the six months ended June 30, 2026, compared to net cash provided by financing activities of $7.1 million for the corresponding period in 2025. The $11.0 million decrease in net cash provided by financing activities was driven by $6.5 million of net proceeds from long-term debt, primarily related to draws on our ABL Facility, in the prior year period, compared to net repayments of long-term debt in the current period.
Previous wording
The Company has entered into several manufacturing and purchase agreements to purchase coffee products from third-party suppliers. The minimum purchase amounts are based on quantity and in the aggregate will be approximately $26.5 million for the remainder of 2026; $32.4 million for 2027; $15.1 million for 2028; and $14.9 million for 2029. See Note 9, Commitments and Contingencies to the consolidated financial statements included in Item 1 of Part I of this Quarterly Report for information regarding such manufacturing and purchase agreements.
Current wording
The Company has entered into several manufacturing and purchase agreements to purchase coffee products from third-party suppliers. The minimum purchase amounts are based on quantity and in the aggregate will be approximately $20.9 million for the remainder of 2026; $32.4 million for 2027; $15.1 million for 2028; and $14.9 million for 2029. See Note 8, Commitments and Contingencies to the consolidated financial statements included in Item 1 of Part I of this Quarterly Report for information regarding such manufacturing and purchase agreements.
Previous wording
Liabilities relating to operating leases that have commenced as of March 31, 2026 have been reported on the consolidated balance sheets as "Operating lease liabilities". Payments on leases are expected to be approximately $3.7 million in the next twelve months, and approximately $30.4 million beyond twelve months through 2043.
Current wording
Liabilities relating to operating leases that have commenced as of June 30, 2026 have been reported on the consolidated balance sheets as "Operating lease liabilities". Payments on leases are expected to be approximately $3.7 million in the next twelve months, and approximately $29.5 million beyond twelve months through 2043.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Net revenue for our DTC channel for the three months ended June 30, 2026 increased $3.8 million, or 14%, to $31.4 million as compared to $27.6 million for the corresponding period in 2025. The increase was primarily driven by growth at third-party digital marketplaces, which was partially offset by declines in subscription revenue.
Current report — wording carried from elsewhere
(1) Gross margin is calculated as gross profit as percentage of revenue, net.
Current report — wording carried from elsewhere
The following table summarizes net sales by channel for the periods indicated (dollars in thousands, unaudited):
Current report — wording carried from elsewhere
Interest expense, net for the six months ended June 30, 2026 decreased approximately $1.7 million, or 41%, to $2.5 million as compared to $4.2 million for the corresponding period in 2025. The decrease was primarily driven by a lower average outstanding balance of the ABL Facility during the first six months of 2026 compared to the corresponding period in 2025.