Coffee Holding Co., Inc. — Third Quarter 2026 Earnings Summary

Financial Performance

• Net sales for the three months ended July 31, 2026, totaled $21,686,262, a 9.3% decrease from $23,910,514 in the same period in 2025.
• Cost of sales was $16,262,131 (75.0% of net sales) for the quarter, compared to $21,655,486 (90.6% of net sales) in 2025.
• Gross profit increased to $5,424,131 from $2,255,028 in the prior year period; gross margin improved to 25.0% from 9.4%.
• Total operating expenses decreased to $3,099,801 from $3,350,179 in the prior year period, driven by a reduction in selling and administrative expenses to $2,899,193 from $3,166,764.
• Net income was $1,993,438 ($0.35 per share basic and diluted), a turnaround from a net loss of $1,205,413 ($0.21 per share) in the prior year period.
• For the nine months ended July 31, 2026, net sales were $69,378,258 compared to $68,535,860 in 2025; net income was $3,904,247 ($0.68 per share) compared to $591,898 ($0.10 per share) in 2025.
• Cash and cash equivalents increased to $2,915,888 at July 31, 2026, from $701,872 at October 31, 2025.
• The line of credit balance decreased to $2,150,000 at July 31, 2026, from $6,050,000 at October 31, 2025.
• Net cash provided by operating activities for the nine months ended July 31, 2026, was $7,795,367, compared to net cash used of $5,396,716 in the same period in 2025.

Guidance and Future Outlook

• Management expects additional tariff refunds to enhance earnings over the next two quarters.
• The Company anticipates growing revenue levels, gross margins, and profitability through the end of calendar 2026 and into calendar 2027.
• Management notes that volatility in the green coffee market shows no clear signs of abating and major national brands show no indication of price decreases.

Business Segments and Product Lines

• The Company reported retaining 100% of its wholesale roasted customer base.
• The Company initiated promotional activity for wholesale roasted coffee customers and charged lower prices to wholesale green coffee customers due to declining market prices.
• The Company holds eight proprietary brands targeting different consumer segments and roasts/blends coffees for major wholesalers and retailers.
• The Company imports green coffee beans from around the world for resale to smaller regional roasters and coffee shops in the U.S. and Canada.

Market and Competitive Landscape

• Green coffee prices experienced sustained decline beginning in late January 2026, with prices trading in a $1.00 per lb. range and daily fluctuations reaching $0.50 per lb.
• The Company capitalized on a favorable inventory position acquired during the first half of fiscal 2026 when coffee prices declined significantly.
• Tariff refunds recognized during the current period contributed approximately $0.06 per share to earnings.

Risks and Challenges

• Forward-looking statements identify risks including product demand, pricing, market acceptance, hedging activities, and the effect of economic conditions such as tariffs.
• Risks also include intellectual property rights, competitive products, financing efforts, and the ability to complete transactions.
• Actual results may differ materially from forward-looking statements due to known and unknown risks beyond the Company's control.

Management Commentary and Tone

• CEO Andrew Gordon described the quarter as the "most volatile three months in the history of the coffee market" but expressed pleasure in reporting $0.35 per share earnings.
• Management credited the decision not to charge most wholesale roasted customers tariffs during 2025 as the correct move, which allowed the retention of the customer base and maintenance of historical profit margins.
• Management stated the Company is "well positioned" to grow revenue and profitability despite market volatility.

Other Key Points

• A dividend of $0.08 per common share was declared during the quarter, totaling $467,813 in payments for the nine-month period.
• The Company purchased an investment for $850,000 during the nine months ended July 31, 2026.
• Equity investments increased to $889,651 at July 31, 2026, from $39,651 at October 31, 2025.
• Retained earnings increased to $16,549,748 at July 31, 2026, from $13,113,314 at October 31, 2025.
• Total stockholders' equity increased to $31,017,440 at July 31, 2026, from $27,581,006 at October 31, 2025.
• Accounts receivable decreased to $8,985,454 at July 31, 2026, from $12,093,251 at October 31, 2025.
• Inventories decreased to $19,480,689 at July 31, 2026, from $20,446,481 at October 31, 2025.