Black Rifle Coffee Company’s revenue took a hard hit in Q4 2024 as sales dropped double-digits in the quarter, according to the brand’s latest earnings report this morning. But, the company said, that decline is in part due to growing pains as the brand increases its attention on wholesale and RTD products.
Full year earnings for Black Rifle were down 1% from 2023 to $391.5. million, while Q4 revenue fell 11.5% to $105.9 million.
In Q4, a 17.7% hit to DTC sales and an 8.6% wholesale revenue decline proved to be a drag on the business’s overall performance, though the brand continued to increase distribution for its RTD products in the quarter, including the initial rollout of its Black Rifle Energy line.
For the full year, CFO Steve Kadenacy noted during the earnings call that the company’s Outpost cafe locations, DTC and “a normalizing trend in liquidation related revenue” offset “solid growth” for Black Rifle’s bagged coffee, pods and RTD offerings.
“We remain focused on gaining new retail distribution, expanding our shelf presence with existing retail customers and supporting velocity growth through marketing and promotions,” Kadenacy said. “Our segment level performance for 2024 reflected our strategic shift towards the wholesale segment.”
Wholesale made up 63% of Black Rifle’s total sales last year, up from 57% in 2023, while sales to food, drug and mass retailers were 3.5x higher in 2024, Kadenacy said.
The decline in DTC – down 14% for the full year – is in part from cannibalization as “the growing availability of Black Rifle products in retail, shifting consumer preferences away from direct to consumer channels and our deliberate reallocation of resources towards wholesale and away from DTC” affected the channel performance, he added.
On the earnings call, Black Rifle CEO Chris Mondzelewski told investors and analysts that the company is placing a strong focus on its Energy line, which he said is “off to a strong start and will continue to ramp throughout 2025 and 2026.”
The line began rolling out to stores in December and in the first month in stores, Mondzelewski said Energy achieved a 17% ACV with a footprint in around 7,000 retail locations thanks to the distribution support from Keurig Dr Pepper (KDP), which also distributes energy drinks from GHOST, C4 and Bloom. Black Rifle is aiming to achieve an ACV of around 20%-30% this year, he noted.
Mondzelewski added that “energy specific marketing spend will ramp up throughout the year in parallel with distribution expansion” and that a “significant portion” of the company’s overall marketing budget this year will go towards promoting the line.
“Our research shows 58% of our coffee consumers also drink energy beverages, with 90% preferring natural ingredients,” he said.
“In limited measurement, we’re actually seeing the product turn reasonably well in the retailers that we have begun distribution,” he added during the call’s Q&A portion. “In Q2, we’ll provide some more details on overall performance as we’ll be into the season by then and we’ll have more data, but we’re really excited about the start.”