Farmer Brothers Co. Reports Decline in Sales and Increased Losses in Q2 Fiscal 2026

Farmer Brothers Co. reported a decline in financial performance for the second quarter of fiscal 2026, with net sales of $88.9 million, a decrease of 1.2% from $90.0 million in the same period last year. For the six months ending December 31, 2025, net sales totaled $170.5 million, down 2.6% from $175.1 million in the prior year. The decrease in revenue was attributed primarily to declining volumes, despite a slight increase in average unit prices due to price adjustments made to customers. Gross profit also fell significantly, dropping to $32.3 million for the quarter, compared to $38.8 million a year earlier, resulting in a gross margin of 36.3%, down from 43.1%.

The company's operating expenses decreased to $36.4 million for the three months ended December 31, 2025, from $37.8 million in the prior year, primarily due to reductions in selling and administrative costs. However, the company still reported a loss from operations of $4.1 million, a significant decline from an income of $1.0 million in the same quarter last year. The net loss for the quarter was $4.9 million, compared to a net income of $210,000 in the prior year, reflecting an 85.5% increase in losses year-over-year.

In terms of operational metrics, Farmer Brothers reported a decrease in coffee pounds sold, with 5.2 million pounds sold in the latest quarter, down from 5.3 million pounds a year earlier. The company continues to face challenges related to rising commodity costs, particularly for green coffee, which have impacted profitability. As of December 31, 2025, the company had $4.2 million in cash and cash equivalents, down from $6.8 million at the end of the previous fiscal period, and total liabilities of $115.8 million, slightly reduced from $117.7 million.

Strategically, Farmer Brothers has focused on maintaining its market position amid economic pressures, including inflation and supply chain challenges. The company has committed to purchasing $39.6 million in green coffee inventory under fixed-price contracts, which may help stabilize costs in the future. Looking ahead, management remains cautious about the economic environment and its potential impact on sales and profitability, emphasizing the need for continued operational efficiency and strategic initiatives to navigate these challenges.

Overall, Farmer Brothers Co. is navigating a challenging market landscape with declining sales and increased costs, leading to significant losses. The company is focused on strategic purchasing and operational efficiencies to mitigate these impacts while preparing for potential future economic fluctuations.