Doubling Down On Wholesale: BRC's Revenue Projection For The Long Haul

Needham analyst Matt McGinley initiated coverage on BRC Inc BRCC at a Hold rating.
The analyst expects the company to benefit from distribution gains in ready-to-drink and roast coffee in 2023.
However, Mcginley projects a slight decline in the DTC business in 2023 on a shift in advertising spending towards the wholesale channel. Also, the analyst expects the DTC segment to be the slowest-growing in the long term.
Nevertheless, the analyst expects higher wholesale business growth in 2023 and 2024, with an increase in Outpost growth starting in 2025.
The analyst sees wholesale business as the largest segment over time, with segment revenues more than doubling to over $500 million in the long term.
The analyst projects unit growth in 2024, with the Outpost category being the major growth contributor in 2025.
The analyst expects revenues of $418.9 million and EBITDA of $5.4 million in 2023 and $530.8 million and $37.1 million, respectively, in 2024.
Earlier this month, BRCC reported Q1 2023 revenues of $83.5 million, beating the consensus of $81.3 million, while the EPS loss of $(0.08) was in line with the market estimates.
Price Action: BRCC shares are trading lower by 4.3% at $5.39 on the last check Wednesday.

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