BRC Inc.

Greetings and welcome to the Black Rifle Coffee Company first quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Matthew McGinley, Vice President of Investor Relations. Thank you. You may begin.

Good morning, everyone, and thank you for joining Black Rifle Coffee Company's first quarter 2026 financial results conference call. We released our results yesterday and the press release and related materials are available on our investor relations website at ir.blackriflecoffee.com. Before we begin, I would like to remind you of the company's safe harbor statement regarding forward-looking statements. During today's call, management may make forward-looking statements, including guidance and the underlying assumptions. These statements are based on expectations that involve risks and uncertainties, which could cause actual results to differ materially. For a further discussion of these risks, please refer to our previous filings with the SEC. Additionally, this call will include non-GAAP financial measures, such as adjusted EBITDA, Whenever we refer to EBITDA, we mean adjusted EBITDA unless otherwise noted. Reconciliation of non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release, which was furnished to the SEC and is available on our investor relations website. Now, please refer to the presentation on our investor relations website and turn to slide four. I would now like to turn the call over to Chris Monzaleski, CEO of Black Rifle Coffee Company. Monz?

Thanks, Matt. Good morning, everyone. Joining me today are Evan Hafer, our Executive Chairman, Matt Amy, our Chief Financial Officer, and Matt McGinley, our Head of Investor Relations. 2026 is off to a strong start, with first quarter performance reflecting meaningful progress against our core growth priorities. In coffee, we are seeing the benefits of disciplined execution come through clearly in our results. Distribution gains across key retail partners are translating into higher volume, better shelf productivity, and improved SKU-level performance. Importantly, this is not just about expanding doors. It is about expanding our shelf presence and making the space we earn more productive, which improves retailer velocity and supports stronger growth and profitability for both our partners and Black Rifle. We remain focused on disciplined resource allocation, prioritizing the channels, customers, and products where we see the highest return. Operationally, the business is becoming more efficient. Productivity initiatives and process discipline are contributing to improved margins and and more effective conversion of revenue into earnings. While the external environment remains dynamic, we are operating with greater control and visibility, maintaining a clear focus on translating commercial progress into improved business results. Overall, first quarter performance reinforces our confidence in the business and our ability to deliver profitable growth through 2026. Moving to slide six. In packaged coffee, first quarter growth reflected broad-based strength across customers and formats, including strong dollar in unit performance at mass merchants, sales that nearly doubled in grocery, and pack size innovation that supported new bagged coffee distribution in the dollar channel. According to Nielsen, Black Rifle Coffee grew 34.6% in the quarter, or more than two and a half times the category growth rate, driving meaningful share gains. Bagged coffee dollar share increased 55 basis points to 3.3%. And pods increased 45 basis points to 2.2% at the end of the quarter. Importantly, these gains were supported by continued improvements in shelf productivity. In grocery, bagged coffee unit velocity increased despite higher pricing and expanded shelf presence, underscoring strong consumer demand and our competitive position at retail. Turn to slide seven, please. Execution against our land and expand strategy continues to translate into gains in retail breadth and shelf presence. In the first quarter, we expanded distribution by approximately seven points of ACV year over year, reflecting continued success in adding new retail doors and broadening our in-store visibility. At the same time, we are increasing our presence within these doors. The average grocer is now carrying nearly two more Black Rifle items than a year ago. As we continue to build on initial placements and expand shelf sets taken together, these results demonstrate that both elements of the strategy are working. We are adding new points of distribution while also deepening our assortment across existing accounts. These gains are strengthening relationships with new and existing retailers while reinforcing our ability to earn additional shelf space over time. Slide eight. Across the broader category, much of the dollar growth remains price-driven, particularly among legacy brands. Our performance continues to be driven by both unit gains and pricing. We remain among the strongest performers in unit growth, reflecting continued consumer demand at the shelf. In a category where much of the reported growth is price-led, that performance is translating into share gains and stronger shelf productivity. That matters to retailers because they understand that healthy category growth comes from increasing consumer demand on a unit basis, not from pricing alone. Packaged coffee remains a core driver of the business, and these trends reinforce the quality and sustainability of our growth in the category. Turning to slide nine. Our direct-to-consumer business continues to show improvement, delivering its second consecutive quarter of year-over-year growth as our channel strategy evolves. Marketplaces are playing a larger role in scaling the model. These platforms expand our reach by meeting customers where they already shop and provide a low friction entry point for customer acquisition. Importantly, they add incremental consumer reach and demand while complementing rather than replacing our retail presence and owned channels. At the same time, BlackRifleCoffee.com serves a distinct strategic role. It remains the core platform for subscriptions and our most loyal customers, supporting deeper engagement, exclusive offerings, and stronger pricing discipline. We are seeing early traction from this refined approach. Marketplaces are driving customer acquisition and top of funnel growth, while our owned channel is focused on retention, repeat purchases, and long-term customer value. As a result, direct-to-consumer is contributing more consistently, reflecting clearer roles for the marketplaces and BlackRifleCoffee.com within the broader business. Slide 10. In ready-to-drink coffee, category trends remain challenging in the first quarter, with convenience channel softness weighing in on both our performance and the broader category. Despite that, we expanded distribution with ACV up nearly eight points year over year, reflecting continued success in adding new doors and broadening our presence across retail. We are concentrating on the areas we can control. We are prioritizing channels and partners where we are seeing stronger demand while continuing to deepen our presence in grocery, mass merchants, and other retail environments that support more consistent takeaway. At the same time, we are using product and innovation as a disciplined growth lever, ensuring new items and platforms are aligned with the channels and occasions where they can perform most effectively. This approach supports a more focused RTD strategy, prioritizing retail environments where takeaway is most consistent and the economics are most compelling. Slide 11. In energy, we continue to move from our initial launch to a more deliberate phase of expansion, reaching 21% ACV across more than 22,000 doors in the first quarter. Our focus this year in energy remains on selectively expanding in markets and channels where we are seeing early traction. This approach allows us to concentrate investment behind the strongest opportunities while scaling energy at a measured pace. Before I turn it over to Matt, I want to briefly highlight how we're continuing to support the communities at the core of our mission. During the first quarter, we remained active across a range of initiatives that brought together partners, veterans, military families, and local communities through events, direct support, and collaborations. We partnered with Operation Homefront and the Dallas Cowboys to host a baby shower for new and expecting military families. We also partnered with Team Red, White, and Blue in support of a nationwide effort to honor those who served in the global war on terror, while raising funds to support veteran health and wellness. We worked with Beyond the Call to launch a limited time roast honoring the legacy of World War II veterans and helping fund efforts to preserve their stories. Across these efforts, we continue to support members of our community, serving in the Middle East and around the world, helping ensure they and their families have the resources, connection, and recognition they deserve. That same commitment will carry forward as we move through the year, including through initiatives tied to America's 250th anniversary that celebrate service and expand our support for veterans and their families. Supporting this community is not a standalone initiative for us. It is core to who we are and how we operate.