BREA, Calif., USA – Reborn Coffee Inc., a leader in the specialty coffee industry, has reported its financial and operational results for the third quarter ended September 30, 2024. Despite higher food costs, in the nine months ending September 30, 2024, revenue was steady at $4.1 million as compared to the same period revenue in 2023. Company-operated store gross margins for nine months ended September 30, 2024, increased to 72% compared to 68% for the same period in 2023.
The company ended Q3’24 with 12 open locations, with one location in development. Q3’24 wholesale and online sales grew 432% to $140,407 from $26,401 in Q3’23.
Q3 2024 and Subsequent Events
- Acquired a 58% stake in Bbang Ssaem Bakery, one of Korea’s most iconic bakery brands with an estimated $7 million trailing twelve months revenue through November, 2024, serving as a launchpad for Reborn Coffee’s entry into the South Korean franchise market and deliver premium coffee and bakery experiences to new locations.
- Landmark distribution agreement through Bbang Ssaem Bakery F&B will bring Reborn’s preservative-free, signature baked goods to approximately 8,000 stores of a major coffee chain across South Korea.
- Strategic joint venture with Gaingan Humantech Co. LTD to open three new Reborn Coffee locations in Bangkok, Thailand.
- Announced a significant expansion into the China market through a strategic Master License Agreement with Chengdu Octaday Entertainment Group, facilitated by Reborn China, to establish premier locations in Chengdu, the capital of the Sichuan Province.
- Closed a Master License Agreement (“MLA”) with Shenyang Yongsheng Seven Stars Tourism Development Co. that will establish Reborn Coffee premier locations in Shenyang, the capital of Liaoning Province. The Shenyang flagship store will, with its all-encompassing brand center, lays the foundation for a broader expansion across China.
- Strategic joint venture with China’s AI company Penglai Data Store to Lead and develop master franchises in China, Hong Kong and Macao.
- Set to launch new cold brew Fruit Infused, including the Miami Passion blend, nationwide, capturing U.S. demand for premium ready-to-drink options as the brand builds on its success.
- Introduced new innovative, IF Design Award-winning patented coffeeware for global distribution, starting with the highly anticipated Reborn Tumbler.
Anticipated Milestones
- Expand more rapidly across South Korea, leveraging Bbang Ssaem Bakery ‘s established presence in the Korean market and a new franchise initiative.
- Capture notable share of the growing RTD coffee segment with the nationwide rollout of Cold Brew line.
- Open three new Reborn Coffee locations in Bangkok, Thailand, including a flagship location at One Bangkok, a landmark mixed-use development.
- Establish flagship store in the iconic New Century Global Center, located in Chengdu, the capital of Sichuan Province.
- Global rollout of patented coffeeware, targeting key markets, including the U.S., China, and Southeast Asia.
- Establish locations in Shenyang, the capital of Liaoning Province, including a flagship store.
- Incorporating advanced AI technology into new franchises in the China region, followed by the United States.
- Establish flagship in Dubai, UAE and 20 more stores across the UAE, plus a distribution center for the Middle East, and roasting and warehouse facilities.
- Establish flagship store in Guangzhou, China, followed by additional locations in Shanghai and Shenzhen.
Reborn Coffee Inc.: Third Quarter 2024 Financial Results
Revenues were $1.3 million for the three months ended September 30, 2024, compared to $1.5 million for the comparable period in 2023, representing a decrease of 17%. The decrease in sales for the period was primarily due to the closure of underperforming stores. For the nine months ended September 30, 2024, revenues were $4.1 million, compared to $4.2 million in the prior year period, a decrease of 8%.
Company-operated store gross profit was $0.7 million for the three-month period ended September 30, 2024, compared to $1.0 million for the comparable period in 2023. Q3’24 company-operated store gross margins decreased to 61% compared to 70% for the same period in 2023.
Wholesale and online revenue for the third quarter of 2024 was $140,407, an increase of 432% from $26,401 in the third quarter of 2023.
Total operating costs and expenses for the three-month period ended September 30, 2024, were $2.0 million compared to $2.2 million for the comparable period in 2023.
Net loss for the third quarter of 2024 was $0.7 million, compared to a net loss of $0.7 million for the third quarter of 2023.
Net cash used in operating activities for the nine months ended September 30, 2024, was $3.3 million, compared to $3.0 million for the nine months ended September 30, 2023.
Cash and cash equivalents totaled $0.1 million as of September 30, 2024, compared to $0.2 million as of December 31, 2023.
