Coffee Holding 2025 Q3 Earnings Misses Targets with Net Income Decline

Coffee Holding reported mixed Q3 2025 earnings, with revenue rising 27% year-over-year but a net loss swinging to $0.21 per share. The company missed profitability expectations and provided no formal guidance, though it expressed optimism for Q4 profitability and dividend affirmation.

Revenue
Coffee Holding reported total revenue of $23.91 million in Q3 2025, a 27.1% increase from $18.81 million in the same period a year prior. This growth was driven by strong performance across its segments, with green coffee contributing $10.47 million and packaged coffee accounting for $13.44 million, reflecting the company’s diversified product mix and recent acquisition integration.

Earnings/Net Income
The company reported a net loss of $1.21 million, or $0.21 per share, in Q3 2025, compared to a net income of $626,796, or $0.11 per share, in the prior-year quarter. This represents a significant 292.3% decline in net income and a 290.9% negative change in EPS, primarily driven by the negative impact of derivative positions. The earnings results were below expectations, indicating financial pressure despite strong top-line growth.

Price Action
Coffee Holding’s stock edged up 1.67% during the latest trading day and rose 2.89% during the most recent full trading week. However, it declined slightly by 0.79% month-to-date, reflecting mixed investor sentiment in response to the earnings report.

Post Earnings Price Action Review
Despite a challenging quarter marked by market volatility and unfavorable coffee price movements, Coffee Holding’s operational performance remained strong. A $2.2 million negative impact from derivative positions led to a net loss, but the company is anticipating a reversal of this unrealized loss in Q4, which is expected to improve profitability and support a previously announced year-end dividend. As the company depletes its tariff-free inventory, it may implement tariffs on wholesale and retail customers to preserve margins, following industry trends. Management expressed confidence in the recovery of coffee prices and the accretive impact of its recent acquisition, Second Empire, on future earnings.

CEO Commentary
CEO Andrew Gordon highlighted the 27% year-over-year revenue increase and noted that operational strength persisted despite the earnings loss. The loss was attributed to a $2.2 million hit from derivative positions due to falling coffee prices during the quarter. Gordon emphasized that coffee prices have since rebounded to near-historic levels, ensuring inventory security through the end of 2025. He also expressed optimism about the fourth quarter, including the reversal of unrealized losses, the potential for dividend affirmation, and the successful performance of the Second Empire acquisition, which is now expected to be accretive to earnings.

Guidance
While no formal guidance was provided, the company expects Q4 profits to improve due to derivative reversals and the continued integration of Second Empire. Management also indicated that tariff adjustments may be necessary in the coming months to maintain margins, aligning with industry practices.

Additional News
Coffee Holding’s recent acquisition of Second Empire proved profitable within a short period, with the business turning a profit in July 2025. Management now expects it to be accretive to earnings going forward. The company also announced plans to manage the impact of tariffs by depleting its existing tariff-free inventory and potentially passing on costs to customers in the future. These moves are intended to preserve margins amid a volatile coffee market. In a broader strategic update, Coffee Holding emphasized its strong position in the U.S. coffee market, offering a broad array of coffee products through eight proprietary brands and serving both wholesale and retail clients. The company remains focused on maintaining pricing discipline and leveraging market opportunities despite ongoing challenges from external factors such as tariffs and global supply dynamics.