Doubling Down On Wholesale: BRC's Revenue Projection For The Long Haul

  • Needham analyst Matt McGinley initiated coverage on BRC Inc BRCC at a Hold rating.
  • The analyst expects the company to benefit from distribution gains in ready-to-drink and roast coffee in 2023. 
  • However, Mcginley projects a slight decline in the DTC business in 2023 on a shift in advertising spending towards the wholesale channel. Also, the analyst expects the DTC segment to be the slowest-growing in the long term.
  • Nevertheless, the analyst expects higher wholesale business growth in 2023 and 2024, with an increase in Outpost growth starting in 2025.
  • The analyst sees wholesale business as the largest segment over time, with segment revenues more than doubling to over $500 million in the long term.
  • The analyst projects unit growth in 2024, with the Outpost category being the major growth contributor in 2025. 
  • The analyst expects revenues of $418.9 million and EBITDA of $5.4 million in 2023 and $530.8 million and $37.1 million, respectively, in 2024.
  • Earlier this month, BRCC reported Q1 2023 revenues of $83.5 million, beating the consensus of $81.3 million, while the EPS loss of $(0.08) was in line with the market estimates.  
  • Price Action: BRCC shares are trading lower by 4.3% at $5.39 on the last check Wednesday.
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