Coffee Holding reports Q3 EPS (21c) vs. 11c last year

Reports Q3 revenue $23.9M vs. $18.8M last year. “We had net sales of $23.9M for the three months ending July 31, 2025 compared to $18.8M for the same period in 2024, an increase of 27%. However, we experienced a net loss of $1.19M for the period, as our derivative positions represented a $2.2M negative impact on our profitability.” Said Andrew Gordon, CEO. “Operations continue to remain strong, and it was unfortunate that our derivatives had such an effect on our results, but the coffee market was in freefall for most of the quarter as the uncertainty and the impact of President Trump’s tariffs along with the weight of next Brazil’s harvest sent coffee prices spiraling lower by $1.25 in the third quarter. Fortunately, we held our positions during the period, as coffee prices have now resumed their prior upward trajectory and are trading near all-time historic highs again. We believe this will ensure that our inventory positions continue to be secured at least through the end of 2025. In addition, we believe a reversal of the unrealized loss on many of these derivatives in the fourth quarter will occur, thereby boosting profits and confirming the previously announced anticipated dividend based on our year-end profits. Also, during this quarter, our latest acquisition, Second Empire, recorded a profit in July. This success in a relatively short period of time hopefully confirms the future success of our initiatives. We now expect Second Empire to be accretive to earnings on a go-forward basis. Although our borrowing increased during this quarter, we built our inventories in advance to avoid the maximum impact of the tariffs. This was essential, as the decline in coffee prices forced many of our competitors into price concessions, which now have to be reversed due to the recent climb in coffee prices. Our company, on the other hand, held to our previously announced price increases and did not pass on the additional costs resulting from the tariffs to our customers, which had a minimal impact on us for the three-month period. Moving forward, however, as we continue to deplete our ‘tariff-free’ inventories, it may become necessary for us to implement tariffs to many of our wholesale and retail customers, similar to what the national brands are doing, in order to maintain our margins. We do not expect major pushback against implementing such price increases as this has unfortunately become normalized in the industry over the last several months. Lastly, although this quarter’s earnings were disappointing due to the unrealized loss on derivatives, operations still remain profitable during what I consider to be the most challenging period I’ve seen in my forty years in the coffee industry. I believe we are headed for a promising outlook for the fourth quarter and the near future.”