Westrock Coffee 2025 Q1 Earnings Misses Targets with Net Income Decline

Westrock Coffee (WEST) reported its fiscal 2025 Q1 earnings on May 08th, 2025. The company’s financial results revealed a net loss of $27.22 million for the quarter, marking a 15% increase from the previous year's loss of $23.67 million. Earnings per share also declined, reporting a loss of $0.29 compared to $0.27 in 2024 Q1. Despite the widened loss, Westrock reaffirmed its guidance for 2025 and 2026, aligning with previously stated expectations. The company remains optimistic about its strategic plans and operational advancements.

Revenue
Westrock Coffee's total revenue for Q1 2025 rose by 11.1% to reach $213.80 million, compared to $192.50 million in Q1 2024. The Coffee & Tea segment contributed significantly with $120.67 million, while Flavors, Extracts & Ingredients generated $43.25 million. Green Coffee added $49.72 million, and other revenue streams accounted for $162,000.

Earnings/Net Income
Westrock Coffee's losses increased to $0.29 per share in Q1 2025, up from $0.27 per share in Q1 2024, with net loss widening to $-27.22 million. The company continues to face financial challenges, as evidenced by ongoing losses over several years.

Price Action
The stock price of Westrock Coffee showed no change during the latest trading day, increased by 3.89% over the past week, and edged up 0.49% month-to-date.

Post-Earnings Price Action Review
Over the past five years, Westrock Coffee's strategy of buying shares after a quarter-over-quarter revenue drop and holding for 30 days has resulted in significant underperformance. This approach yielded a return of -33.36%, compared to a benchmark return of 21.93%, leading to an excess return of -55.29%. The strategy exhibited a compounded annual growth rate (CAGR) of -10.85% and experienced a maximum drawdown of -63.95%. These results demonstrate high risk and negative returns, indicating that the strategy may not be viable for investors seeking stable performance.

CEO Commentary
Scott T. Ford, CEO and Co-founder of Westrock Coffee, expressed optimism about the company's start to 2025, highlighting solid financial results and progress towards becoming a premier integrated supplier to leading coffee, tea, and energy brands. He emphasized significant advancements at the Conway facility, noting the successful scaling of sales volume and exceeding expectations with the launch of a second single-serve cup facility. Ford reaffirmed confidence in delivering the company's strategic plan, maintaining a positive outlook for the future.

Guidance
The company reaffirms its previously stated guidance for 2025 and 2026 regarding Consolidated Adjusted EBITDA, Segment Adjusted EBITDA, and Beverage Solutions credit agreement secured net leverage ratio. Forward-looking statements include expectations around volume growth in the core coffee business, compliance with financial covenants, and anticipated expense savings from cost reduction and facility consolidation efforts.

Additional News
Westrock Coffee has recently emphasized sustainability efforts, with a 2024 report detailing initiatives to enhance responsible sourcing and supply chain transparency. The company is committed to offering 100% responsibly sourced coffee and tea by the end of 2025, with 89% responsibly sourced coffee and 100% responsibly sourced tea as of 2024. Additionally, Westrock has invested in sustainable manufacturing practices at its Conway facility, aiming to recycle over a billion gallons of water annually. The company also focuses on minimizing landfill waste and improving energy efficiency. These efforts showcase Westrock's dedication to environmental stewardship and sustainable operations.