Westrock Coffee Company ((WEST)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Westrock Coffee Company recently held its earnings call, revealing a strong growth trajectory despite facing challenges such as high coffee prices and tariffs. The company expressed optimism, driven by significant expansion in its manufacturing capabilities, particularly with the Conway facilities. This positive outlook is further supported by robust sales growth and strategic wins in the single-serve cup market.
Revenue and EBITDA Growth
Westrock Coffee Company reported an 11.1% increase in net sales compared to the first quarter of 2024. The combination of Beverage Solutions and SS&T segment EBITDAS reached $11.5 million, marking a 3.3% increase over the prior year. The company projects adjusted EBITDA for the first half of 2025 to rise by approximately 25% over the previous year, with a full-year increase of about 35% over 2024.
Conway Facilities Launch
The company successfully launched two new manufacturing facilities in Conway, Arkansas, including the largest roast-to-extract-to-RTD facility. These facilities are expected to significantly enhance performance, with the capacity to produce hundreds of millions of RTD cans and billions of single-serve cups annually.
Strong Single-Serve Cup Performance
Westrock Coffee Company experienced significant growth in its single-serve cup segment, driven by several private label and branded product wins. The company is expanding its capacity to meet high demand in this area.
Sustainable Sourcing Segment Growth
The sustainable sourcing traceability segment saw a 44% increase in sales compared to the first quarter of 2024. Segment adjusted EBITDA increased from $300,000 to $1.9 million, reflecting strong performance in this area.
Net Loss
Despite positive developments, the company reported a net loss of $27.2 million for the first quarter of 2025, highlighting the challenges it faces.
Impact of High Coffee Prices and Tariffs
Westrock Coffee Company continues to grapple with historically high green coffee prices and anticipates the impact of new tariffs on coffee costs to begin in the second quarter, which could pressure liquidity.
Conway Scale-Up Costs
The company’s consolidated adjusted EBITDA was impacted by $3.3 million in Conway scale-up operating costs, reflecting the financial burden of expanding its manufacturing capabilities.
Forward-Looking Guidance
During the earnings call, Westrock Coffee Company reaffirmed its guidance for the first half and full year of 2025. The adjusted EBITDA from the Beverage Solutions and SS&T segments is expected to range between $27.5 million and $34 million for the first half, marking a 25% year-over-year increase. For the full year, the adjusted EBITDA guidance is projected to be between $75 million and $88 million, reflecting a 35% rise over 2024. Key drivers include the commercial launch of new manufacturing facilities and successful customer wins.
In summary, Westrock Coffee Company’s earnings call highlighted a strong growth trajectory supported by strategic expansions and robust sales growth, despite challenges such as high coffee prices and tariffs. The company’s positive outlook and forward-looking guidance suggest a promising future, driven by enhanced production capabilities and market positioning.