Coffee Holding Co., Inc. Reports Second Quarter Results and New Dividend.

Rhea-AI Summary

Coffee Holding Co. (NASDAQ: JVA) reported strong Q2 FY2025 results, with earnings rising to $0.11 per share compared to a loss in Q2 2024. Revenue grew 22% year-over-year while maintaining a 19% gross margin. The company navigated challenges including record-high Arabica prices in February and potential tariff concerns in April. JVA strategically increased inventory positions during market selloffs to gain competitive advantages. The company's Empire Coffee Company acquisition showed improvement, cutting losses by half and increasing sales. Notable developments include the resumption of an annual dividend policy of 33% of net earnings, reflecting improved free cash flow and working capital position.

Positive

• Revenue growth of 22% year-over-year
• Earnings improved to $0.11 per share from a loss in Q2 2024
• Maintained 19% gross margin despite market challenges
• Lower selling, general and administrative expenses achieved
• Strategic inventory positioning ahead of potential tariffs
• Empire Coffee acquisition showing faster than expected turnaround
• Introduction of new dividend policy at 33% of net earnings

Negative

• Losses on largest wholesale supermarket customer due to prior contractual obligations
• Delayed effect of price increases affecting gross margins temporarily
• Impact of record-high Arabica prices requiring multiple price increases
• Empire Coffee subsidiary still operating at a loss, though improving

Insights

Financial Analyst

JVA reports strong Q2 with 22% revenue growth, 19% margins, improved profitability, and announces new dividend policy.

Coffee Holding Co's Q2 results demonstrate a remarkable turnaround with earnings of $0.11 per share compared to a loss in Q2 2024. Revenue increased by 22% year-over-year while maintaining the previous quarter's 19% gross margin - impressive considering they lost money on their largest wholesale supermarket customer due to prior contractual obligations at lower coffee prices.

The company navigated unprecedented market volatility skillfully. Arabica coffee prices surged 25% in February, forcing price increases to customers. While these increases initially compressed margins, they're now fully implemented, suggesting improved profitability moving forward. Management demonstrated strategic foresight during the April market selloff by opportunistically increasing inventory positions before potential tariffs, securing lower-cost inventory that provides a competitive advantage.

The Empire Coffee acquisition shows promising progress, with losses cut in half from Q1 and sales returning to pre-decline levels. Management expects this business to become accretive to earnings by next quarter, much sooner than initially anticipated, indicating successful integration and operational improvements.

Most significantly, JVA is resuming its annual dividend at 33% of net earnings for the first time in many years, signaling management's confidence in sustainable improved cash flow and working capital position. This shareholder-friendly capital allocation policy adds a meaningful income component to the investment thesis and suggests management's positive outlook on future performance.

STATEN ISLAND, New York, June 13, 2025 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. (Nasdaq: JVA) (the “Company,” “our” or “we”) announced its operating results for the fiscal quarter ended April 30, 2025.

• Earnings increased to $.11 cents per share this fiscal quarter compared to a slight loss in second quarter of 2024.
• Revenues increased 22% compared to second quarter of 2024.

“We are pleased to report another quarter of strong results to our shareholders” said Andrew Gordon, President and CEO of Coffee Holding Company Inc.

“We grew sales by 22% while maintaining last quarter’s 19% gross margin on our revenues, in spite of our losing money on our largest wholesale supermarket customer during the quarter, due to a prior contractual obligation at lower green coffee market pricing. In addition, our revenues growth was achieved with lower selling, general and administrative expenses, indicating that future revenues growth may be achieved more efficiently to improve our bottom line results.

Although the quarter proved challenging, I believe we navigated the situation well to produce a positive outcome for our shareholders. Early February saw Arabica prices trade up 12 consecutive days to lifetime highs, up over $1.00/lb. or 25% in a little over three weeks. This rapid, unprecedented move in green coffee prices forced us to initiate another round of price increases for our private label and branded coffee products. Unfortunately, price increases to these customers typically have a delayed effect and thus our gross margins and profitability on these accounts were negatively affected for several weeks during the quarter. However, all increases are now in effect and our results moving forward should reflect this fact.

Following February’s dramatic market move, the announcement of potential tariffs on imports of coffee spooked the market in early April; sending coffee prices sharply lower, as macro and future demand concerns weighed on market sentiment. We were opportunistic during the selloff, extending inventory positions ahead of the potentially negative effects of tariffs; providing us with additional inventory coverage at lower “tariff free” market price levels. Because of this, we believe these tariffs, along with the rebound in the green coffee market, will give us a slight tailwind to start the third quarter, as many of our competitors have been forced to increase prices to most customers, thus giving us a competitive advantage for the immediate future. This is extremely important as our sales of our Café Caribe and Café Supremo continue to remain strong in the highly competitive Latin espresso coffee space.

The results from our recent acquisition, Empire Coffee Company, were also encouraging as we cut our loss from the first quarter in half and increased our sales by quarter’s end to the level which Empire was at prior to their descent on tough times. We believe that this business, Second Empire, will be accretive to earnings by the end of our next quarter, confirming the anticipated turnaround in operations in a much shorter time frame than we had hoped for when we originally assessed the acquisition opportunity.

Lastly, we are happy to announce that we will be resuming our annual dividend of 33% of net earnings for the first time in many years, as we believe our year end results will reflect both an improved increase in free cash flow and working capital” ended Andrew Gordon.

About Coffee Holding

Founded in 1971, Coffee Holding Co., Inc. (NASDAQ: JVA) is a leading integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points. Coffee Holding’s product offerings consist of eight proprietary brands, each targeting a different segment of the consumer coffee market as well as roasting and blending coffees for major wholesalers and retailers throughout the United States who want to have products under their own names to compete with national brands. In addition to selling roasted coffee, Coffee Holding also imports green coffee beans from around the world, which it resells to smaller regional roasters and coffee shops around the United States and Canada.

Forward looking statements

Any statements that are not historical facts contained in this release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including the Company’s outlook on the revenue growth. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. We have based these forward-looking statements upon information available to management as of the date of this release and management’s expectations and projections about certain future events. It is possible that the assumptions made by management for purposes of such statements may not materialize. Such statements may involve risks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, hedging activities, the effect of economic conditions (including tariffs), intellectual property rights, the outcome of competitive products, risks in product development, the results of financing efforts, the ability to complete transactions and other risks and uncertainties described in the “Risk Factors” section of documents filed by the Company from time to time with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made.

Company Contact

Coffee Holding Co., Inc.
Andrew Gordon
President & CEO
(718) 832-0800 

FAQ

What were Coffee Holding Co's (JVA) Q2 2025 earnings per share?

Coffee Holding Co. reported earnings of $0.11 per share in Q2 FY2025, compared to a loss in Q2 2024.

What is Coffee Holding Co's (JVA) new dividend policy?

The company announced a new annual dividend policy of 33% of net earnings.

How much did Coffee Holding Co's (JVA) revenue grow in Q2 2025?

Revenue grew by 22% compared to the second quarter of 2024.

How is Coffee Holding Co's Empire Coffee acquisition performing?

Empire Coffee showed improvement by cutting losses in half and increasing sales, with expectations to be accretive to earnings by next quarter.

What was Coffee Holding Co's (JVA) gross margin in Q2 2025?

The company maintained a 19% gross margin on revenues during Q2 2025.

How did Coffee Holding Co (JVA) handle the Arabica price increase in February 2025?

The company initiated price increases for private label and branded coffee products to address the 25% increase in Arabica prices.