Westrock Coffee Co. of Little Rock (Nasdaq: WEST) reported a $19.1 million third-quarter loss Thursday, wider than the $14.3 million loss the company posted in the same quarter in 2024.
The publicly traded coffee, tea and extracts company said net sales were $354.8 million for the quarter, an increase of 60.7% compared with the same quarter a year ago.
Westrock also said that it has a new product line focused on ultra-filtered, milk based, high protein.
“I believe that our customers and our competitors are keenly aware of the market share shifts that we are beginning to cause as these new plants scale operationally,” Scott T. Ford, Westrock CEO and co-founder, said during an earnings conference call Thursday. “We have been successful at winning our customers trust because we have spent three years, over $350 million in capital and the time of 1,400 highly skilled development and manufacturing professionals to provide them a set of products and services that they can count on for quality, convenience, innovation and price.”
Westrock, however, has had its challenges.
“I also believe that historically high coffee prices and major tariffs on coffee imports, coupled with the two extra quarters it took us to reach scaled production levels in our Conway plants, has given some investors pause,” Ford said.
But he said Westrock has received a $30 million investment from its “traditional core shareholder group.”
The company’s stock has been hovering near all-time lows. Shares closed at $3.92 on Thursday, down nearly 8%, then regained more than 5% in after-hours trading. Over the past 12 months, shares were down about 47%.
Westrock’s beverage solutions segment generated $263 million in sales in the third quarter, an increase of 60.4% from the same quarter in 2024.
Its sustainable sourcing and traceability segment generated $91.8 million in sales in the quarter, an increase of 61.5% from the same period last year.
Meanwhile, Westrock’s adjusted earnings before interest, taxes, depreciation and amortization for the quarter was $23.2 million and included $3 million in scale-up costs tied to its Conway plant, an increase from $10.3 million and $4 million of scale-up costs from the same quarter a year ago.
Westrock’s CFO Chris Pledger said that commodity coffee price increases, which Westrock passes on to its customers, also contributed to its growth during the quarter.
Also, capital expenditures totaled about $18 million in the quarter, primarily related to the Conway extract and ready-to-drink facility, he said.
Westrock also updated its guidance for the year. Its adjusted EBITDA will be between $60 million and $65 million, which is consistent with the guidance it provided at the beginning of the year, Pledger said.
“With 60% of our coffee coming from Brazil, and Brazil having the highest tariff, … it’s hard to produce product in the coffee space without using Brazil coffee,” he said.
But he said Westrock looks at ways to be efficient with the coffee blends it produces.
“My guess is, the longer the coffee prices stay high, the more innovation people will have around that, including us,” Pledger said.
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