Coffee Service

Coffee Holdings boosts Q3 income despite COVID-19 sales hit

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September 14, 2020

Coffee Holding Co. Inc's. $17.3 million sales for the third quarter of 2020 ending July 31 marked a 19.7% decrease from the $21.5 million for the same period in 2019, due to the COVID-19 pandemic that forced many of the company's foodservice customers to suspend or close operations.

Nevertheless, the company had a net income of $391,324, or $0.07 per share basic and diluted, for the three months ended July 31, 2020 compared to net income of $111,494, or $0.02 per share basic and diluted for the three months ended July 31, 2019, according to an earnings report.

Company shares traded at $3.59 on Sept. 11, showing some upward motion following a decline from $5.03 in December of 2019.

"I'm pleased to report our second consecutive profitable quarter, as we earned 7 cents per share despite a 19.7% decline in sales as the impact of the COVID-19 pandemic continues to negatively impact sales of green coffee," Andrew Gordon, president and CEO, said in a prepared statement. "Unlike last quarter, sales of our roasted private label products were unable to offset the lower sales of green coffee. Unfortunately, the surge in overall industry supermarket sales of coffee seen from March through June of this year, which saw overall industry coffee sales throughout the market spike by 8.1% year over year, did not continue into the summer months.

"However, heading into the September through November period, which have traditionally been our strongest months from a sales perspective, I expect to see a buying surge from our supermarket customers, for both private label and branded products, as our customers' inventory stockpiles have likely been reduced to pre-pandemic levels," he said.

Gross profit for the three months was $3.82 million, or 22.1% of net sales, as compared to $4.12 million, or 19.1% of net sales, for the three months ended July 31, 2019.

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