Limoneira 2025 Q2 Earnings Misses Targets with Net Income Down 151.3%

Limoneira (LMNR) reported its fiscal 2025 Q2 earnings on June 9, 2025, revealing a challenging quarter marked by a significant decline in net income and revenue. The company missed expectations as it swung to a loss of $0.20 per share, compared to the previous year's profit of $0.36 per share. The strategic merger with Sunkist Growers is anticipated to yield substantial cost savings and operational improvements starting in fiscal year 2026, which could bolster future performance.

Revenue

In fiscal 2025 Q2, Limoneira posted a total revenue of $35.12 million, marking a 21.3% decline from $44.61 million in the same quarter of 2024. The fresh lemons segment contributed $22.65 million, while lemon packing added $4.65 million. Avocado sales rose to $2.78 million, supported by strong pricing. Other agribusiness operations generated $3.50 million, and corporate and other revenues accounted for $1.54 million. The overall revenue downturn was driven by a weaker lemon market.

Earnings/Net Income

The company experienced a downturn in earnings, reporting a net loss of $3.37 million in 2025 Q2, a 151.3% decline from the previous year's net income of $6.55 million. The EPS loss of $0.20 indicates challenging conditions.

Post-Earnings Price Action Review

The post-earnings price action strategy of buying LMNR when revenue exceeds expectations and holding for 30 days delivered an 11.36% return. However, it significantly underperformed the benchmark, resulting in an -82.31% excess loss. The strategy's Sharpe ratio of 0.06 indicates poor risk-adjusted returns, and a maximum drawdown of -49.10% highlights its vulnerability in market downturns. This approach underscores the high risks associated with the strategy, emphasizing the need for caution when employing similar tactics in fluctuating markets.

CEO Commentary

Harold Edwards, CEO of Limoneira, highlighted the merger with Sunkist as a pivotal development in the citrus industry, leveraging Limoneira's expertise with Sunkist's distribution capabilities to create value for stakeholders.

Guidance

Limoneira forecasts $5 million in annual cost savings and EBITDA improvement starting in fiscal 2026 due to the Sunkist merger. The company expects to enhance grower recruitment and packing margins, providing stability against lemon price fluctuations and supporting sustainable EBITDA growth.

Additional News

Limoneira recently announced a strategic merger with Sunkist Growers to consolidate its citrus sales and marketing operations under Sunkist's umbrella, effective November 1, 2025. The merger is expected to generate $5 million in annual cost savings and enhance operational efficiency. Additionally, Limoneira declared a quarterly dividend of $0.075 per share, maintaining its commitment to returning value to shareholders. Moreover, the company initiated a $30 million share repurchase program, reflecting its focus on strategic capital allocation and long-term shareholder value creation. These moves underscore Limoneira's strategic initiatives to strengthen its market position and financial stability.