Farmer Brothers Co. Reports Decline in Net Sales and Increased Operating Losses for Quarter Ended March 31, 2025

Farmer Brothers Co. reported a decline in net sales for the three months ended March 31, 2025, totaling $82.1 million, down 3.9% from $85.4 million in the same period last year. The decrease was attributed to a reduction in the volume of coffee pounds sold, despite higher pricing. However, for the nine months ended March 31, 2025, net sales increased slightly by 0.2% to $257.1 million compared to $256.7 million in the prior year, primarily driven by improved pricing. Gross profit for the quarter rose to $34.5 million, reflecting a gross margin of 42.1%, up from 40.1% a year earlier, while gross profit for the nine-month period increased to $110.7 million, with a gross margin of 43.0%.

The company experienced a significant increase in operating expenses, which rose to $38.1 million for the three months ended March 31, 2025, compared to $34.7 million in the prior year. This increase was largely due to a $2.4 million loss on the disposal of assets, contrasting with a gain of $2.9 million in the same quarter last year. Consequently, Farmer Brothers reported a loss from operations of $3.6 million for the quarter, compared to a loss of $468,000 in the previous year. For the nine-month period, the loss from operations was $5.4 million, a substantial decline from an income of $1.9 million in the prior year.

In terms of strategic developments, Farmer Brothers has been focusing on its operational efficiency and cost management. The company has not introduced any new product categories that significantly impacted sales during the reported periods. As of March 31, 2025, the company operated a distribution network comprising 234 delivery routes and 97 branch warehouses, serving a diverse customer base that includes independent restaurants and large institutional buyers. The company’s employee headcount remained stable, supporting its operational needs.

Looking ahead, Farmer Brothers anticipates that macroeconomic factors, including inflation and commodity price volatility, may continue to impact its financial performance. The company has committed to purchasing green coffee inventory totaling $56 million under fixed-price contracts, which may help mitigate some of the risks associated with fluctuating coffee prices. Despite the challenges, management remains optimistic about leveraging its operational capabilities and strategic initiatives to enhance profitability in the coming quarters. The company believes that its current cash position, along with available credit under its Revolver Credit Facility, will be sufficient to meet its working capital and capital expenditure requirements for the next 12 months.