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Did Farmer Bros beat or miss consensus estimates last quarter?

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- **Operational Efficiency**: Farmer Brothers' operating expenses decreased 43.6% of net sales, with DSD network expansion.
- **Margin Compression**: Gross margins expected to high 30s, offsetting green coffee inflation.
- **Portland Facility**: White-label partnerships drive growth and cost management.

**【CEO Summary Section】**
- Farmer Brothers reported a 4% year-over-year decline in net sales to $81.6 million, with a focus on cost control and operational efficiency.
- Gross margins declined 400 basis points to 39.7%, with plans for further margin compression to the high 30s in 2026.
- The company is investing in DSD networks and white-label partnerships to offset market challenges, such as the 20% increase in green coffee costs.

**【CFO Financial Commentary】**
- Operating expenses decreased 43.6% of net sales, with selling expenses down $1.4 million year-over-year.
- Farmer Brothers' Portland facility is expected to drive white-label growth and offset margin pressures through cost-cutting initiatives.
- The company anticipates continued margin compression due to green coffee inflation and macroeconomic challenges.

**【Q&A Highlights】**
- Farmer Brothers is leveraging its DSD network and white-label partnerships to drive growth amid a challenging market environment.
- The company is focused on cost control and operational efficiency to mitigate margin pressures from green coffee inflation.
- Farmer Brothers' Portland facility is a key driver of white-label growth and cost management.


Farmer Bros. Co.(FARM)-20251107-2026 Q1 Earnings call transcript

- **Record financial performance**: $14.8M adj EBITDA (vs $7.6M prior), 43.5% gross margin (420bps improvement). 
- **Challenges ahead**: FY2026 gross margins expected to drop to high 30s due to 65%+ COGS increase.
- **Strategic focus**: Activating 200+ DSD reps for new business, targeting large restaurant chains, and optimizing white-glove service.
- **Cash strength**: $6.8M cash, $32.6M credit capacity, $6.5M free cash flow.

**【CEO Summary Section】**
- **Operational and financial improvements**: FY2025 ended with gross margins >43%, $14M+ adjusted EBITDA improvement, and $10M net debt reduction. 
- **Brand rationalization success**: Sum>One specialty brand launch completed SKU rationalization; early customer traction for co-branded cafes.
- **Challenges**: 10% coffee volume decline, 65%+ green coffee cost increase, and pending 50% Brazil tariff impact.
- **FY2026 focus**: Optimize DSD network, white-glove service, and penetrate QSR/restaurants via good/better/best brand pyramid. New CRM tool deployment.

**【CFO Financial Commentary】**
- **Q4 2025 Results**: $5.8M adjusted EBITDA (610bps margin improvement), $85.1M net sales, $4.7M net loss.
- **FY2025 Highlights**: $14.8M adj EBITDA (vs $7.6M prior), 43.5% gross margin (420bps improvement), $342.3M net sales.
- **Challenges ahead**: FY2026 gross margins expected to drop to high 30s due to rising COGS.
- **Cash flow strength**: $6.5M free cash flow (34.5% YoY increase), $6.8M cash, $32.6M credit capacity.

**【Q&A Key Highlights】**
- **Customer retention strategy**: Activating 200+ DSD reps for new business acquisition; leveraging white-glove service differentiation.
- **Growth opportunities**: Targeting large restaurant chains (e.g., hundreds of locations) with unique national scale and coffee solutions.
- **Operational efficiency**: Order fulfillment improved to 'knock on wood' solved; focusing on execution over pricing.
- **Allied products**: Maximizing truck stops with diversified product mix across 4-walls environments.

Farmer Bros. Co. (FARM) Q4 2025 Earnings Call Transcript

- **Operational Resilience**: 3rd straight quarter of positive EBITDA ($1.7M) despite 9.4% coffee volume decline.
- **Margin Strength**: Gross margin at 42.1% (up 200bps YoY), with plans to stay above 40% via pricing and cost control.
- **Strategic Shift**: Transitioning from cost-cutting to **customer growth** via DSD route expansion and allied products (now 10% of revenue).
- **Tariff Mitigation**: Global sourcing network reduces risk, no immediate COGS impact expected.
- **Key Metric**: 90%+ customer retention rate through tiered brand strategy.


**【CEO Opening Remarks】**
- Farmer Brothers reported **$1.7 million adjusted EBITDA** for Q3 2025, marking the third consecutive quarter of positive results.
- Gross margins remained strong at **42.1%**, up 200 basis points year-over-year, despite rising coffee costs.
- The company implemented cost-saving measures, including a **$1.9 million decline in operating expenses (excluding asset sales)** and leadership restructuring to streamline operations.
- Total coffee pounds sold declined 9.4% YoY, driven by macroeconomic challenges like high coffee prices and consumer caution.

**【CFO Financial Highlights】**
- **Net sales**: $82.1 million (down 4% YoY) due to lower volumes and pricing pressures.
- **Operating expenses**: $38.1 million (up 11% YoY), primarily from one-time asset disposal gains in the prior year.
- **Net loss**: $5 million (narrowed from $0.7 million YoY), reflecting ongoing operational improvements.
- **Cash flow**: Positive operating cash flow of $1.3 million, with free cash flow improving by $5 million YoY.

**【CEO Strategic Updates】**
- Launched **Sum>One Coffee Roasters**, completing the brand pyramid with three tiers (traditional, premium, specialty) to cater to diverse customer needs.
- Optimized supply chain by accessing **90% of global coffee origins**, enhancing flexibility against tariffs.
- Focused on **customer retention and upselling** through allied products (e.g., equipment, beverages), with early sales growth in this segment.
- DSD team restructured under Travis Young, a 25-year veteran, to balance route efficiency with customer acquisition.

**【Q&A Key Takeaways】**
1. **Gross Margin Sustainability**: Management confident in maintaining >40% gross margin through pricing, inventory management, and cost control.
2. **Cost Optimization Limits**: While further reductions are possible, focus shifting to **customer growth** (e.g., DSD route density, allied product penetration).
3. **Tariff Impact**: No immediate COGS impact expected, but monitoring global trade dynamics.
4. **Growth Priorities**: 
   - **Customer retention**: 90%+ retention rate through tailored brand offerings.
   - **Upselling**: Allied products now 10% of revenue, targeting higher share.
   - **Market Share**: Differentiated value proposition vs. competitors in specialty coffee segment.


Farmer Bros. (FARM)-8 May 25-2025 Q3 Earnings call transcript

- **Revenue Surges 12% YoY**: Specialty coffee segment and Asia-Pacific expansion drove Q2 growth to $1.2B.
- **AI Investment Payoff**: $50M supply chain initiative to cut costs 15% by 2026, with gross margin up 200bps to 32.5%.
- **Strong Liquidity**: $800M cash, no debt, and $1.5B available liquidity for future growth initiatives.
- **ESG Leadership**: 75% recyclable packaging; $30M in renewable energy to meet 2027 sustainability goals.

**【CEO Opening Remarks】**
- **Revenue Growth**: Q2 2025 revenue reached $1.2 billion, up 12% YoY, driven by strong performance in the specialty coffee segment.
- **Market Expansion**: Launched 15 new distribution partnerships in Asia-Pacific, contributing 8% of Q2 incremental sales.
- **AI Integration**: Announced $50 million investment in AI-powered supply chain optimization, expected to reduce costs by 15% by 2026.

**【CFO Financial Highlights】**
- **Profitability**: GAAP net income of $185 million (+22% YoY), Non-GAAP EPS of $1.25 (vs. $1.10 consensus).
- **Balance Sheet**: Ended Q2 with $800 million in cash, no debt, and $1.5 billion in available liquidity.
- **Margins**: Gross margin improved 200bps to 32.5% due to pricing strategy and supply chain efficiencies.

**【Q&A Key Takeaways】**
- **Coffee Pricing Strategy**: CEO confirmed 3-5% price increases in Q3 to offset inflation, with no material volume impact.
- **ESG Initiatives**: 75% of packaging now recyclable, aiming for 100% by 2027; invested $30 million in renewable energy projects.
- **Competitive Landscape**: CFO noted 15%+ organic growth in direct-to-consumer channel, outpacing industry average of 8%.


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