BRC Inc. 10-Q Summary: Q2 2026
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026. BRC Inc. (trading as Black Rifle Coffee Company) is a Veteran-founded consumer products company operating in three primary channels: Wholesale, Direct-to-Consumer (DTC), and Outpost retail stores. The company is classified as an accelerated filer, smaller reporting company, and emerging growth company.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Revenue, Net | $107.0 million | $94.8 million | $216.2 million | $184.8 million |
| Gross Profit | $36.5 million | $32.2 million | $72.6 million | $64.6 million |
| Gross Margin | 34.1% | 33.9% | 33.6% | 35.0% |
| Operating Income (Loss) | $1.1 million | ($12.6 million) | $2.4 million | ($18.1 million) |
| Net Loss (BRC Inc.) | ($0.1 million) | ($5.3 million) | ($0.1 million) | ($8.2 million) |
| Cash & Equivalents | $12.0 million (as of June 30, 2026) | |||
| Working Capital | $30.8 million (as of June 30, 2026) | |||
| Debt (Total Principal) | $35.4 million (as of June 30, 2026) | |||
| Available Borrowing Capacity | ~$50.4 million (ABL Facility) |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 13% QoQ and 17% YTD, driven primarily by a 15% increase in Wholesale revenue (due to expanded distribution and SKU expansion) and a 14% increase in DTC revenue (driven by third-party marketplace growth).
- Profitability Improvement: The company returned to operating profitability in Q2 2026 ($1.1M) compared to a loss of $12.6M in Q2 2025. This was achieved through significant expense reductions.
- Expense Reductions:
- General & Administrative (G&A): Decreased 35% QoQ and 26% YTD due to lower legal/consulting fees and reduced depreciation.
- Other Operating Expenses: Decreased 98% QoQ and 92% YTD, largely due to the absence of legal contingency charges recorded in the prior year.
- Salaries & Wages: Decreased 2% QoQ due to headcount reductions from the Operational Improvement Plan.
- Outpost Channel Decline: Outpost revenue decreased 15% QoQ and 14% YTD due to lower transaction volumes and average order values at company-operated stores.
- Cash Flow: Operating cash flow turned positive, providing $12.6 million YTD 2026 compared to a use of $7.5 million YTD 2025.
Guidance, Outlook, and Risks
- Operational Improvement Plan: The company implemented a plan to reduce costs and improve efficiency, reducing headcount by approximately 80 employees. Total costs were ~$6.8 million, with estimated annualized savings exceeding $12.2 million. Approximately $10.4 million in savings have been realized as of June 30, 2026.
- Strategic Focus: Management expects continued growth in Wholesale and DTC channels. The Outpost channel is being stabilized with a focus on profitability, which may include closing underperforming locations.
- Stock Price Risk: The company faces a risk of delisting from the NYSE if its Class A Common Stock trades below $1.00 for 30 consecutive days. Shareholders have authorized a potential reverse stock split (1-for-10 to 1-for-50) to address this.
- Legal Contingencies:
- A settlement with John Brian Clark was finalized in Q2 2026.
- A lawsuit with a co-manufacturer regarding contract fees is ongoing; the company has accrued $2.7 million for this matter.
- Liquidity: Management believes current cash, operating cash flow, and available credit facilities ($50.4M) are sufficient to fund operations for the next 12 months.
Key Facts for Investor Verification
- Delisting Risk: Verify the current trading price of Class A Common Stock relative to the $1.00 NYSE minimum requirement and the status of the authorized reverse stock split.
- Customer Concentration: One customer and its affiliate accounted for 29% of Q2 2026 revenue and 31% of YTD 2026 revenue.
- Debt Covenants: Confirm continued compliance with borrowing base calculations and covenants under the ABL and Term Loan facilities.
- Outpost Performance: Monitor the trajectory of the Outpost channel, as management indicated potential closures of underperforming locations to improve profitability.
- Legal Accruals: Track the resolution of the co-manufacturer lawsuit and whether the $2.7 million accrued liability is sufficient.