Black Rifle Coffee's Q4 2024: Unpacking Contradictions in DTC Strategy, Barter Impact, and Distribution Plans

These are the key contradictions discussed in Black Rifle Coffee's latest 2024Q4 earnings call, specifically including: DTC business strategy, impact of barter transactions on P&L, Walmart's share of FDM business, distribution expansion plans, and tariffs on aluminum:



Improved Financial Performance:
- Black Rifle Coffee reported that adjusted EBITDA tripled in fiscal year 2024 compared to the prior year.
- The gross margin improved by 9.5 points, reaching 41.2%.
- These improvements were driven by operational efficiencies, supply chain productivity, and investments in trade spend and pricing.

Distribution and Market Expansion:
- The company's ACV in grocery increased by 28 points, reaching 45% by the end of the year.
- RTD sales grew by 0.5% despite a category decline, with ACV increasing by 4 points to 47%.
- The growth was due to strategic investments in operations, infrastructure, and brand, along with effective distribution and product innovation.

Direct-to-Consumer Segment Stabilization:
- The direct-to-consumer segment saw a 14% revenue decline due to increased retail availability and shifting consumer preferences.
- The company is focusing on stabilizing transactions and optimizing the channel, with plans to improve the user experience and enhance product offerings.
- Stabilization efforts include enhancing leadership and improving the website and app, aimed at increasing loyalty and subscriber engagement.

Energy Drink Launch:
- Black Rifle Energy reached 17% ACV in its first month of availability, with distribution in nearly 7,000 retailers.
- The energy drink category is expected to contribute significantly to growth in 2025, supported by a partnership with Keurig Dr Pepper for manufacturing and distribution.
- The launch timing aligns with retail seasonality, and marketing efforts will ramp up in the summer months to drive consumer adoption.