BRC (BRCC) Q2 2024 earnings summary

Executive summary

• Q2 2024 net revenue was $89.0 million, down 3% year-over-year, with wholesale revenue up 8% and DTC and Outpost channels declining.

• Gross margin improved to 42% from 35% year-over-year, with gross profit rising 16% to $37.2 million.

• Adjusted EBITDA reached $8.5 million, up from breakeven or $0.1 million in Q2 2023, and net loss narrowed to $1.4 million from $14.7 million.

• Free cash flow was $1.0 million, a $31 million improvement year-over-year, marking the third consecutive quarter of positive free cash flow.

• Announced the launch of Black Rifle Energy™, a zero-sugar energy drink, with national RTD rollout planned for Q4 2024 and FY25.

Financial highlights

• Q2 2024 revenue: $89.0 million (down 3% year-over-year); gross profit: $37.2 million; gross margin: 41.9%–42%.

• Adjusted EBITDA for Q2 was $8.5 million, with margin at 9.5% and year-to-date adjusted EBITDA at $22.6 million.

• Free cash flow for Q2 was $1.0 million, a $31 million improvement year-over-year.

• Net loss narrowed to $1.4 million from $14.7 million in Q2 2023.

• Working capital improved, including a $6 million sequential inventory decrease and $75 million year-on-year reduction.

Outlook and guidance

• 2024 revenue guidance revised to $385–$415 million due to delayed wholesale rollouts and product refreshes.

• Gross margin guidance raised to 39%–42%; adjusted EBITDA guidance reiterated at $32–$42 million; free cash flow conversion targeted at 80%.

• Expectation of significant revenue inflection in 2025 as FDM and energy drink distribution ramps up.

• Excluding barter transactions, projected 2024 net revenue growth increases by 5%.

• Sufficient liquidity is expected to fund operations and commitments for at least the next twelve months.