What Can We Learn From Brcc
Now you can Black Rifle coffee stock! To grow their brand, Black Rifle has been very successful by taking a particular stance from other companies in the segment. This move requires a loyal customer base that agrees with this stance. However, this brand positioning can limit sales growth and opportunity for capital from those that disagree with some political views in the long term.
Some of BRCCs consumers may have stopped buying from them when BRCC made a move that wasnt in line with the consumers beliefs. We can use this knowledge to invest. Smaller companies looking to grow can build their brand in a partisan way if they have a loyal customer base that responds well to the image portrayed.
These are great small-cap targets for us. As they get larger, theyll need to make a cautious shift to their branding to be more inclusive. The sooner this is done, the better making a slight course correction early in the case of BRCC focused on military veterans issues, you can bring more of your base with you and attract a wider clientele leading to a successful future.
Black Rifle Coffee Stock May Look Tempting But Wait Until The Price Retreats
Black Rifle Coffee stock is losing steam after its red-hot debut via reverse merger. The sell-off in growth stocks is affecting the coffee company.
The coffee company went public on Feb. 10, but investors have been moving towards safer stocks. That is why cryptocurrencies and explosive growth stocks have not done well this year.
There are investment opportunities out there for those who are willing to be aggressive. Some of the most successful trades in finance history were made during a recession.
Black Rifle Coffee Company is veteran-owned. They sell organic coffee and related products, including coffees, syrups and chocolates. Evan Hafer founded the company in 2014 after serving as an Army Green Beret in Afghanistan and Iraq.
Black Rifle Coffee still has a close connection to the military. They made national headlines when they vowed to hire 10,000 veterans in 2017. The companys decision came as a response to Starbucks wanting to employ 10,000 refugees.
Their focus lies primarily in their coffee subscription service with more than 100,000 monthly subscribers. This company only has a few physical coffee shops in Utah and Texas.
After a special purpose acquisition company debuts, there is the potential for a significant drop in value. Jumping on BRCC stock right now could lead to losses.
Building A Loyal Consumer Base
Investors are encouraged to invest in Black Rifle or other companies supporting the cause. It would also be beneficial to investigate how much the company is worth and whether or not its making a profit.
This company still makes most of its money online, which drives revenue better than in-store sales.
The value of the direct-to-consumer coffee business in the U.S. has been estimated to be around $4 billion annually. Therefore, even if you get a small chunk of that market, things will improve dramatically for the company.
The coffee itself is of high quality. All Black Rifle Arabica beans have a grade of 83 points or higher , and the coffee is noted for its balance. A 12oz bag of Black Rifle coffee beans ranges from $14.99 to $25 online.
Black Rifles top-line results are looking good, with a compounded annual growth rate of 67% between 2019 and 2020 and a 37% CAGR expected from 2021 through 2023.
Therefore, while the size of its business does not compare with Starbucks, it is still progressing in the right direction. If you want to learn more about the companys financials you can check out a great article from my InvestorPlace colleague Thomas Niel.
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Social Squabbles Could Distract The Company
A central issue Black Rifle faces is in maintaining its cultural positioning without offending people with other sensibilities. Starbucks, for example, has been known to take left-wing positions on some cultural issues but generally has tried to shy away from making politics its defining theme.
Black Rifle, by contrast, often finds itself in the news precisely for its cultural positions. This often displeases both sides. Black Rifle offended people further to the right, for example, by failing to defend the controversial Kyle Rittenhouse. Black Rifles magazine, Coffee or Die, has also generated controversy with its on-the-ground coverage of the Ukraine war and civil unrest in the United States, among other hot button issues.
Theres nothing inherently wrong with a company engaging in rhetoric on controversial and divisive issues. However, the company may need to tone things back a bit to maintain enough mainstream appeal as it picks up momentum in opening additional outposts around the country.
What Happened With Brcc Stock
In a note to clients, Raymond James downgraded BRCC stock to market perform from outperform previously, and removed the $21 price target it had on the shares.
Simply put, the shares have performed very well of late, having appreciated > 50% in the past month and so we believe a neutral stance is justified, wrote Raymond James analyst Joseph Altobello in his assessment of the stock.
At the same time, Black Rifle Coffee announced that it is redeeming all of its outstanding warrants in a move that increases the companys share count and dilutes the number of outstanding shares, which shareholders typically do not like as it waters down their investment.
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Black Rifle Coffee Has Impressive Growth Rates
What makes BRCC stock exciting as an investment is the companys growth trajectory. The companys revenue has been increasing at a rapid rate and management has aggressive targets for the future.
In 2019, the company had $82 million in sales. This jumped by around 100% to $164 million in 2020. In 2021 the company is estimated to have a revenue of $230 million which is a 40.4% increase. The company expects to be making $430.4 million in sales by 2023.
Black Rifle Coffee has a solid plan to drive this revenue growth. At the end of 2021, the company has 16 brick-and-mortar locations. This means that there is plenty of room to further expand its retail presence. The companys digital footprint is very impressive. But an omnichannel approach could really super-charge sales.
According to the companys presentation, opening new outposts, as they call it, leads to an increase in direct-to-consumer sales. Significant DTC sales growth was observed after the opening of the companys San Antonio outpost. The sales growth was in the area within 5-minutes of a particular location.
Efficient Sales Channels Is Propelling Rapid Growth
Black Rifle Coffee is composed of more than just a coffee company. It also offers a magazine and has started to become involved in political and cultural issues with its blog and social media presence.
The company has 285,000 coffee club subscribers and has a lot of cash flow. They started with subscriptions, which is also proving to be very helpful. Black Rifle Coffee has been opening up stores recently and is set to expand the number of physical locations soon.
Today, Black Rifle Coffee is opening up its business to retailers and partners around the country. The expansion will include some of the best-known chains in America like 7-11, Walmart , and Publix. The company has seen incredible growth over the past year in terms of income and could use an even more efficient model to help continue its rise.
Black Rifle Coffee also offers a variety of apparel, accessories, and festive food items to help keep its brand flying high. Along with these products comes a brand that looks great in your local store and has an impact on the sales that support it. The company has partnered with Amazon Prime and its merchandise feature in one of the OTTs action series. This will boost the brand presence and help reach a greater audience.
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For 2021, Black Rifle estimates revenue will grow 40% to $230 million at a gross margin of about 40%. Revenue in 2020 was $164 million, double the $82 million of the year earlier.
It donates part of its profits to support law enforcement, firefighters and First responders.
Black Rifle says it has more than 270,000 subscribers to its coffee club.
The company has seven stores, three operated by the company and four franchised. And it expects nine additional locations by the end of 2021.
Black Rifle sells branded apparel and publishes a magazine called “Coffee or Die.”
Investors have put $300 million into Black Rifle’s equity, led by a $100 million commitment from Engaged Capital, the Newport Beach, Calif., investment firm.
With Black Rifle Coffee Stock Focus On Growth Not Politics
Much of the focus for Black Rifle Coffee has been on the politics behind the brand.
However, not all of its short-lived hot run in late winter/early spring can be chalked up to its political ties.
While market uncertainty has pushed it lower, give it a closer look, as its still a promising growth story.
Its in a different industry, but Black Rifle Coffee is very similar to another stock I profiled a few weeks back. Im talking about CF Acquisition VI . Yes, both names are, or in the case of Black Rifle, were, special purpose acquisition company stocks. The connections, however, between BRCC stock and CFVI stock do not end there.
In what other way are both stocks similar? Their indirect connections to former President Donald Trump and more importantly, to the SPAC thats taking his Trump Media and Technology venture public: Digital World Acquisition Corporation . Like with CFVI, it went on a short-lived hot run due to the Trump/DWAC connection only to take a hard fall.
Yet, while similar to the CFVI situation, there are some key differences. No matter your personal political views, these differences should be what determines whether you make this stock a buy.
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A Public Battle With Starbucks
During the politically tumultuous year of 2017 and in light of President Donald Trump’s travel ban the big coffee kid on the block, Starbucks, vowed to hire 10,000 refugees from those impacted countries. Black Rifle Coffee Company responded with a vow to hire 10,000 veterans. And from that point, things only escalated.
Stemming from a meme that displayed ISIS insurgents with Starbucks cups , Starbucks responded by doubling down on their commitment to those who’ve served in the US military, reasserting their personal goal to hire 5,000 vets each year. According to a 2019 CNBC interview with Starbucks CEO Kevin Johnson, Starbucks was way ahead of their goals, having brought in 26,000 veterans in just six years.
Even so, BRCC’s Evan Hafer wasn’t sold on Starbucks‘ initiative. “hen Schultz says he’s going to hire 10,000 veterans, that’s a publicity stunt,” he told Task & Purpose in 2017. “But when I say I’m going to hire 10,000 veterans that’s because that’s who we are.”
Black Rifle Coffee Company: The Verdict
So what did we think of Black Rifle Coffee? This veteran-owned coffee company offers themed packaging and a wide range of coffee varieties. The flavors are strong and bold, the beans are aromatic and reasonably fresh, and the coffee bags are very convenient. You can save money by signing up for a subscription, and the coffees readily available through Amazon. Plus, this company donates a portion of its profits to law enforcement, veterans, and first responders.
The downsides? This coffee isnt cheap, and even the medium roast is very dark. If you prefer lighter roasts or low-acid coffee, you may want to look elsewhere.
But if you like strong, dark coffee, we recommend you give Black Rifle a try. Were pretty sure the bold flavor will impress you, and you can support veterans at the same time.
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Also hurting gross-profit margin: a shift in product mix from wider-margin direct-to-consumer sales to the wholesale channel, which is mainly its sales of ready-to-drink products.
Black Rifle Coffee
The company spent 5.8% more on marketing to boost its profile with consumers, but the $11.1 million it spent in the latest period fell as a percentage of total revenue.
For all of 2022, Black Rifle now sees total revenue of $315 million, up from an earlier estimate of $311 million. At year’s end the company operated eight company-owned and eight franchised outlets.
Prior to the report, four Wall Street analysts were largely positive on the stock.
Three have buy ratings: Raymond James’ Joseph Altobello rates the stock outperform with a $21 price target.
William Blair’s Sharon Zackfia and Matthew Curtis peg it outperform with no target.
DA Davidson’s Michael Baker calls it a buy with a $16 target. His price target is up $2 from a Dec. 28 initiation on the stock.
And Truist’s Bill Chappell is a bit more conservative with his hold rating but puts up a higher-end price target of $20.
SPACs, or blank-check companies, are formed for the express purpose of finding and merging with an operating partner. The idea is to speed the operating company to the public markets and avoid the extended process of a traditional initial public offering.
Lawsuit Filed Against Black Rifle Coffee : 1791 Management Files Stock Market Manipulation And Securities Fraud Lawsuit Against Brc Inc
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LAS VEGAS, May 19, 2022 /PRNewswire/ — 1791 Management filed a Securities Fraud and Market Manipulation Lawsuit against Black Rifle Coffee . The action charges Black Rifle with intentional violations of securities laws and fraud, including deliberate breach of contract, breach of fiduciary duty, and negligent misrepresentation.
Financial markets help efficiently direct the flow of savings and investment. They facilitate the accumulation of capital and the production of goods and services. If investors perceive the market as unfair and dishonest it would undermine America’s vital economic system.
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Black Rifle Coffee Company To Report Second Quarter 2022 Financial Results On August 11 2022
SALT LAKE CITY, July 28, 2022—-BRC Inc. a rapidly growing and mission-driven premium coffee company founded to support Veterans, active-duty military, first responders and serve a broad customer base by connecting consumers with great coffee and a unique brand experience, today announced that it will report second quarter 2022 financial results before the U.S. stock market opens on Thursday, August 11, 2022. On that day, management will host a conference call and live webcast at 8:00 a.m. ET to discuss the financial results.
Second Quarter 2022 Financial Results
When: August 11, 2022
Time: 8:00 a.m. ET
Live Call: 407-0609 or 689-8541
A webcast of the call will be available on the investor relations page of the Companys website at Black Rifle Coffee Company . For those unable to participate in the conference call, a replay will be available after the conclusion of the call on August 11, 2022 through August 18, 2022. The U.S. toll-free replay dial-in number is 660-6853, and the international replay dial-in number is 612-7415. The replay passcode is 13730916.
About Black Rifle Coffee Company
To learn more about BRCC, visit www.blackriflecoffee.com, follow BRCC on social media, or subscribe to Coffee or Die Magazine’s daily newsletter at .
View source version on businesswire.com:
For inquiries regarding Black Rifle Coffee Company, please contact:
Black Rifle Coffee Has A Strong Niche
So what exactly is Black Rifle Coffee? The company was founded in 2014 by Evan Hafer, a former U.S. Army Green Beret. As a veteran-owned enterprise, Black Rifle takes to heart its mission to support veterans, active-duty military, and other law enforcement.
There is a wide variety of coffee products and apparel in the companys shop. All of them are branded with military themes and a very Americana style. Theres a subscription-style service available as well where customers can get their favorite coffee on a schedule.
I usually like to read the reviews of companies to get a feel of what their customers are saying about them. By most accounts, Black Rifle Coffee makes a pretty good product. Most reviews Ive seen are positive with many reviewers highlighting the dark strong flavors. True to its image, Black Rifle Coffee tends to have more caffeine than the typical brand.
I understand the angle the company is approaching in the coffee industry. It is clearly serving itself as an alternative to the hipster style branding predominantly seen. The hipster style of branding may be alienating to right-leaning conservative Americans. Thus creating a small solid niche for Black Rifle Coffee to dominate.
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Whats Next For Black Rifle Coffee
BRCC stock is pulling back today. But investors should keep in mind that todays decline follows a big run for the shares since they made their market debut a couple months ago.
Look for more analyst reports on Black Rifle Coffee stock in coming months, and expect that the companys share price will stabilize at more reasonable levels.
On the date of publication, Joel Baglole did not have any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.