CH
COFFEE HOLDING CO INC (JVA)·Q4 2022 Earnings Summary
Executive Summary
- Q4 2022 was exceptionally weak: we derive net sales of $15.49M and a net loss attributable to Coffee Holding of $(3.79)M, driven by sharply higher costs, impairment charges, and losses at Generations/Steep N Brew .
- Gross margin compressed to roughly
10% in Q4 (vs$1.8M gain) .18.5% in Q3), reflecting higher green coffee, packaging and freight, plus hedging losses in FY22 ($0.1M) versus FY21 ( - The company disclosed a material weakness and plans to restate FY2020 presentation of net sales/cost of sales, and received a Nasdaq deficiency notice for delayed FY22 10-K filing, creating governance and compliance overhangs that can be stock catalysts .
- No Q4 earnings call transcript or numeric guidance was issued; management’s prior quarter commentary emphasized refocus on core businesses (green beans, proprietary brands, private label) while acknowledging persistent logistics headwinds .
- Street consensus estimates were unavailable via S&P Global (tool access error), so beats/misses vs estimates cannot be assessed; investors should watch for estimate resets post-restatement and FY22 filing [GetEstimates error].
What Went Well and What Went Wrong
What Went Well
- Management emphasized a “simple solution” to grow revenues by focusing on legacy green beans, proprietary brands (Café Caribe, Café Supremo), and private label; sales rose 24.8% YoY in Q3, following +14.0% in Q2 .
- Operating expenses trended down in Q3 (−$333K YoY), with selling/admin and officers’ salaries lower, aiding sequential profitability versus Q2 losses .
- FY22 saw continued demand from legacy customers and new wins in the second half, supporting annual net sales growth to $65.71M (+3% YoY) .
What Went Wrong
- Q4 swung to a very large loss, with derived operating loss of $(4.77)M and net loss of $(3.79)M; margin deterioration from higher input costs, impaired intangibles, and subsidiaries’ losses weighed on profitability .
- Hedging flipped from FY21 profit (
$1.8M) to FY22 loss ($0.1M); logistics/freight costs also surged, with Q3 freight factors up$500K ($0.10/share) . - Governance/compliance: material weakness and planned restatement of FY2020 presentation (net sales/cost of sales), plus Nasdaq notice for delayed FY22 10-K, add uncertainty and potential stock pressure .
Financial Results
Consolidated results vs prior quarters and prior year (derived where noted)
Notes: “derived” figures computed from FY totals and 9M (ended July 31) amounts in company filings; citations point to the source figures.
Product line (annual context)
Guidance Changes
Earnings Call Themes & Trends
No Q4 2022 earnings call transcript was available.
Management Commentary
- “Moving forward, I believe we have a clear direction on how to grow both our sales and profits…by focusing on sales of unroasted green coffee beans…private label products… and a continued push on our own legacy brands.”
- “We experienced an even greater increase [in sales]… 24.8%… A combination of increased sales of our branded products…Café Caribe and Café Supremo, along with sales to new customers were responsible.”
- “The unfortunate downside of our renewed sales growth is the headwinds we continue to face from logistics as our freight factors increased by approximately $500,000… We expect this increase… to continue to weigh our profitability… until supply chain issues mitigate and diesel fuel levels show a meaningful decline.”
- Governance update: Audit Committee concluded errors in FY2020 presentation of net sales/cost of sales; restatement planned and material weakness expected to be reported; investors should rely on restated information for the affected period .
Q&A Highlights
No Q4 2022 earnings call transcript was available. No Q&A themes or clarifications can be assessed [ListDocuments: earnings-call-transcript not found].
Estimates Context
- Wall Street consensus (S&P Global) for Q4 2022 EPS and Revenue was unavailable due to retrieval error. Users should consider that formal consensus may be limited for micro-cap names, and revisit estimate comparisons once filings and restatement are complete. (S&P Global data unavailable; GetEstimates tool returned error.)
Key Takeaways for Investors
- Margin squeeze intensified in Q4: derived gross margin ~10% and EBIT margin ~−31% reflect elevated input/logistics costs, impairment charges, and subsidiary losses; monitor normalization of freight/fuel and hedging outcomes .
- Strategy pivot toward core franchises (green beans, proprietary brands, private label) is consistent and drove multi-quarter sales growth; watch for sustained mix and customer additions to translate to profits as costs normalize .
- Governance/compliance risk: material weakness and restatement, plus Nasdaq notice for delayed 10-K, could be stock overhangs; catalysts include restatement filing and remediation plans .
- Subsidiary drag remains a focus area; prior write-offs and losses weighed FY22—track restructuring and potential divestiture or turnaround milestones .
- Hedge program shift: FY22 loss vs FY21 gain; ensure risk management alignment with commodity volatility and inventory positioning .
- With no guidance and limited Street coverage, price can be sensitive to operational updates and compliance milestones; near-term trading likely driven by filings/restatement headlines and signs of cost relief .
- Medium term: If logistics and cost pressures abate and core sales persist, margin recovery is possible; execution on internal controls and subsidiary restructuring is key to re-rating .