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Coffee Holding Co. Reports 5% Decline in Q2 Net Sales Amid Green Coffee Price Drop
Coffee Holding Co., Inc. (NASDAQ: JVA) announced its operating results for the quarter ended April 30 2026, revealing a 5.1 % dip in net sales to $22.13 million from $23.32 million a year earlier. The company traced the downturn to a sharp slide in green coffee prices that began in late January and persisted through the reporting period.
The $1.19 million decline in net sales—about 5 %—stemmed largely from the firm’s decision to lower prices for both its wholesale roasted‑coffee and green‑coffee customers. CEO Andrew Gordon explained that a 25 % drop in commodity prices curtailed the amount the company could obtain for green‑coffee inventory sold to roaster wholesale customers, and that buyers adopted a “wait‑and‑see” stance toward purchases.
Cost of sales rose to $18.64 million, accounting for 84.2 % of net sales, a slight uptick from 84.0 % a year earlier. The higher cost‑of‑sales ratio was driven mainly by increased product and packaging expenses, even as lower sales volume trimmed overall cost of sales. Gross profit fell to $3.49 million, a $243,000 decrease from $3.73 million in the same quarter last year, and slipped to 15.8 % of net sales from 16.0 %.
Operating expenses climbed by $303,000 to $3.14 million. Selling and administrative costs increased by $345,672 to $2.94 million, while officer salaries dropped to $200,617 from $243,274. The company said it promoted more than anticipated and cut costs for large retail customers to preserve sales forecasts.
Net income for the quarter was $262,489, or $0.05 per share on a basic and diluted basis, down from $644,055, or $0.11 per share, a year earlier. Gordon noted that the commodity price decline eroded profitability, but that national brands maintained list pricing, helping to cushion margin erosion. He also highlighted a positive development: the firm recently secured substantial new business that could be serviced at higher margins due to lower input costs and anticipated improved profit margins on its Cafe Caribe brand.
On the balance‑sheet front, Coffee Holding’s cash and cash equivalents stood at $2.32 million as of April 30 2026, up from $0.70 million a year earlier. Accounts receivable net of allowances were $7.81 million, down from $12.09 million. Inventories were $19.54 million, slightly lower than $20.45 million a year earlier. Current liabilities fell to $8.85 million from $12.81 million, largely because the company reduced its line of credit to $2.65 million from $6.05 million. Total liabilities were $10.07 million, and shareholders’ equity rose to $29.02 million.
The firm’s equity‑method investments grew to $889,652 from $39,651, reflecting a new investment relationship. Right‑of‑use assets were $1.87 million, down from $2.08 million, and deferred income tax assets declined to $173,063 from $229,899.
Gordon emphasized that the company would keep focusing on inventory reduction, citing that the historic peak in green‑coffee prices over the past two years is now behind it and that carrying excess inventory is unnecessary. He expressed confidence that Coffee Holding is well positioned to sustain profitability for the rest of 2026.
The company’s forward‑looking statements include risks related to product demand, pricing, market acceptance, hedging activities, economic conditions, and competitive products. No updates are required unless new information emerges.
In sum, Coffee Holding’s Q2 2026 results mirror the impact of falling green‑coffee prices, modest cost‑control measures, and a strategic pivot toward new business opportunities. The firm’s balance sheet remains solid, bolstered by significant cash reserves and a trimmed credit line. Investors will keep a close eye on inventory levels and margin performance in the coming quarters as the company navigates a volatile commodity market.
The $1.19 million decline in net sales—about 5 %—stemmed largely from the firm’s decision to lower prices for both its wholesale roasted‑coffee and green‑coffee customers. CEO Andrew Gordon explained that a 25 % drop in commodity prices curtailed the amount the company could obtain for green‑coffee inventory sold to roaster wholesale customers, and that buyers adopted a “wait‑and‑see” stance toward purchases.
Cost of sales rose to $18.64 million, accounting for 84.2 % of net sales, a slight uptick from 84.0 % a year earlier. The higher cost‑of‑sales ratio was driven mainly by increased product and packaging expenses, even as lower sales volume trimmed overall cost of sales. Gross profit fell to $3.49 million, a $243,000 decrease from $3.73 million in the same quarter last year, and slipped to 15.8 % of net sales from 16.0 %.
Operating expenses climbed by $303,000 to $3.14 million. Selling and administrative costs increased by $345,672 to $2.94 million, while officer salaries dropped to $200,617 from $243,274. The company said it promoted more than anticipated and cut costs for large retail customers to preserve sales forecasts.
Net income for the quarter was $262,489, or $0.05 per share on a basic and diluted basis, down from $644,055, or $0.11 per share, a year earlier. Gordon noted that the commodity price decline eroded profitability, but that national brands maintained list pricing, helping to cushion margin erosion. He also highlighted a positive development: the firm recently secured substantial new business that could be serviced at higher margins due to lower input costs and anticipated improved profit margins on its Cafe Caribe brand.
On the balance‑sheet front, Coffee Holding’s cash and cash equivalents stood at $2.32 million as of April 30 2026, up from $0.70 million a year earlier. Accounts receivable net of allowances were $7.81 million, down from $12.09 million. Inventories were $19.54 million, slightly lower than $20.45 million a year earlier. Current liabilities fell to $8.85 million from $12.81 million, largely because the company reduced its line of credit to $2.65 million from $6.05 million. Total liabilities were $10.07 million, and shareholders’ equity rose to $29.02 million.
The firm’s equity‑method investments grew to $889,652 from $39,651, reflecting a new investment relationship. Right‑of‑use assets were $1.87 million, down from $2.08 million, and deferred income tax assets declined to $173,063 from $229,899.
Gordon emphasized that the company would keep focusing on inventory reduction, citing that the historic peak in green‑coffee prices over the past two years is now behind it and that carrying excess inventory is unnecessary. He expressed confidence that Coffee Holding is well positioned to sustain profitability for the rest of 2026.
The company’s forward‑looking statements include risks related to product demand, pricing, market acceptance, hedging activities, economic conditions, and competitive products. No updates are required unless new information emerges.
In sum, Coffee Holding’s Q2 2026 results mirror the impact of falling green‑coffee prices, modest cost‑control measures, and a strategic pivot toward new business opportunities. The firm’s balance sheet remains solid, bolstered by significant cash reserves and a trimmed credit line. Investors will keep a close eye on inventory levels and margin performance in the coming quarters as the company navigates a volatile commodity market.
