Coffee costs in Q1 were higher than anticipated, with additional costs expected in Q2 due to hedging and green coffee receipt timing.
Coffee segment pricing benefit updated to mid-20% for fiscal 2026, up from prior 20% estimate.
Coffee volume expected to decline low to mid-teens percentage due to tariff impacts and price elasticity.
First quarter EPS was the softest quarter; second quarter decline now expected greater than first quarter, with a more muted third quarter.
Free cash flow outlook increased from $875 million to $975 million, driven by benefits from the Inflation Reduction Act.
Hostess SKU rationalization did not impact first quarter volume but expected to improve profitability over time.
Overall profit outlook remains intact despite tariff headwinds, with coffee segment profit expected to align with original guidance after absorbing tariffs.
SKU rationalization in Sweet Baked Snacks expected to yield $30 million savings, with $10 million in Q4 and $20 million in fiscal 2027.
Adjusted EPS was $0.35 for the quarter, with adjusted SG&A up 6% due to employee expenses and advertising investments.
Cash flow from operations was $150 million, down year-over-year due to intentional inventory build; capital expenditures were $72 million, targeting capacity and technology.
Foodservice segment delivered 2% organic volume growth and 7% organic net sales growth, outperforming the industry.
Gross profit was flat year-over-year due to higher input costs offsetting top-line growth.
International business showed 8% volume growth and 6% net sales growth, led by China.
Organic net sales increased 6% year-over-year to $3 billion in Q3, with organic volume up 4%.
Raw material cost inflation was approximately 400 basis points in Q3, driven by pork, beef, and nut markets.
Retail segment volume and net sales grew 5%, supported by Turkey portfolio and other retail pillars.
Adjusted EBITDA declined to $15.3 million from $20.1 million, reflecting lower margins and higher noncash expenses related to self-insurance.
Bombshells segment revenues declined due to divestitures and same-store sales decline but returned to profitability with an operating income of $87,000 versus a loss of $8.9 million last year.
Free cash flow remained stable at $13.3 million, with a sequential increase in free cash flow margin to 19% of revenues.
GAAP EPS was $0.46 compared to a loss of $0.56 per share last year; non-GAAP EPS was $0.77 versus $1.35 year-over-year.
Net income attributable to common shareholders was $4.1 million, a significant improvement from a loss of $5.2 million in the prior year quarter.
Nightclub revenues were nearly flat with a slight decline in same-store sales offset by acquisitions; operating income increased to $17.8 million with a margin of 28.5%.
Total revenues for Q3 2025 were $71.1 million, down from $76.2 million year-over-year, primarily due to the sale and divestiture of underperforming Bombshells locations.
Adjusted EBITDA was negative $1.3 million, slightly worse than negative $1.1 million last year, but improved $2.7 million sequentially due to cost reductions.
Cash and equivalents ended at $48.7 million with no debt, supporting liquidity and growth initiatives.
GrowGeneration reported Q2 2025 net revenue of $41 million, exceeding guidance by $1 million but down from $53.5 million in Q2 2024 due to a smaller retail footprint and weaker B2C demand.
MMI Storage Solutions segment revenue grew 69% sequentially to $8.1 million, contributing positively to diversification.
Net loss improved to $4.8 million or negative $0.08 per share from $5.9 million or negative $0.10 per share in Q2 2024.
Operating expenses declined significantly with store and other operating expenses down 23% and SG&A down 13.4% year-over-year.
Proprietary brand sales increased to 32% of total revenue, up from 21.5% in Q2 2024, driving gross margin expansion to 28.3% from 26.9% year-over-year.
Dafinchi
