Coffee Service
Coffee Holding suffers sales, earnings dip in recent quarter
March 18, 2022
Coffee Holding Co. Inc. suffered a decline in sales and earnings for the quarter ending Jan. 31, 2022, according to an earnings release, due mainly to a loss in its Generations/Steep N Brew subsidiary.
- Net sales fell 7.9%, from $18.1 million for the three months ending Jan. 31, 2021 to $16.7 million for the three months ended Jan. 31, 2022. The decrease was due to an approximately $1.3 million decline in sales from the company's Generations/Steep N Brew subsidiary due to loss of customers.
- Net income fell from $756,282 to $342,526 in the comparative quarters, while basic and diluted earnings per share fell from 12 cents to 5 cents.
Increases in freight, labor and the cost of steel prevented additional margin expansion during the three months ended Jan. 31, 2022. Further, higher legal expenses of approximately $213,000 incurred during the quarter as a result of ongoing class action lawsuits that negatively affected results.
"The decrease in our net sales was entirely due to the continued loss of customers from our Steep N Brew subsidiary while sales in our private label and branded coffee products in the legacy Coffee Holding division were steady compared to the first quarter of fiscal 2021, as sales to existing and new customers remained strong at the grocery channel level." Andrew Gordon, president and CEO, said in the press release. "However, sales of green coffee to smaller and medium size roasters declined during the period as many of our smaller roaster customers cut back on purchases and chose to purchase green coffee on a 'hand-to-cup' or as-needed basis due to the elevated prices of green coffee compared to the prices in fiscal 2021."
Shares traded at $3.67 today against a 52-week range of $3.59 to $6.28.
"Overall, our business does remain strong despite the current inflationary environment and we believe our sales, along with our profit margins, will continue to improve throughout fiscal 2022," Gordon said.
