Coffee Service

Coffee Holding reports Q1 2021 sales, earnings decline due to COVID-19

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March 17, 2021

Coffee Holding Co. Inc. reported net sales of $18.13 million for the three months ended Jan. 31, 2021, a decrease of 6%, from $19.28 million for the three months ended Jan. 31, 2020, according to an earnings release. The decrease was due to the COVID-19 pandemic which caused many of the company's green coffee customers who service the foodservice industry to either remain closed or suspend their business operations.

The company had net income of $677,312 or 12 cents per share basic and diluted, for the three months ended Jan. 31, 2021 compared to a net loss of $599,848, or 11 cents per share basic and diluted for the three months ended Jan. 31, 2020.

Shares traded at $5.33 today against a 53-week range of $1.75 to $6.48.

"We are pleased to begin the new fiscal year by reporting a big improvement in our operating results," CEO Andrew Gordon said in the press release. "With last quarter's inventory write-downs from our Generations/Steep & Brew subsidiary behind us, we were able to earn net income of $677,312, or 12 cents a share, as our profit margins improved substantially compared to last quarter.

"With the price of green coffee at three-year highs, we are no longer experiencing the downward pricing pressure of the previous three years which saw coffee prices languish below a $1 per pound for extended periods of time," he said. "Those low commodity prices had a negative impact on the margins of our sales of green unroasted beans as well as forcing us to discount prices of our private label and branded products to remain competitive in a low priced national retail coffee environment."

In addition, during the first quarter of 2021, the company reduced its operating expenses by approximately 10%, he said.

"Although sales decreased by approximately 6% compared to the first quarter of last year, we believe that as businesses continue to reopen, and the new customers we were able to attract over the last several months, we will begin to see a return of positive quarter over quarter revenue growth," he said.

"Lastly, we have nearly completed our initial testing of our CBD infused single serve cups and are hopeful that we will be able to begin offering these for sale to our customers during the second calendar quarter of 2021," Gordon said.

For an update on how the coronavirus pandemic is affecting convenience services, click here.