Farmer Bros (FARM) Q1 2026 earnings summary

Executive summary

• Net sales for the quarter ended September 30, 2025, declined 4.1% year-over-year to $81.6 million, primarily due to lower volumes despite higher average unit prices from price increases.

• Gross margin decreased by 400 basis points year-over-year to 39.7%, driven by higher green coffee commodity costs.

• Adjusted EBITDA remained flat at $1.4 million, with an adjusted EBITDA margin of 1.7%.

• Operational efficiency and cost management led to a $4 million reduction in SG&A expenses year-over-year.

• Net loss improved to $4 million from $5 million in the prior year quarter.

Financial highlights

• Net sales: $81.6 million, down from $85.1 million in the prior year period.

• Gross profit: $32.4 million (39.7% margin), down from $37.3 million (43.9% margin) year-over-year.

• Operating expenses: $35.6 million, down from $40.1 million year-over-year, representing 43.6% of net sales.

• Adjusted EBITDA: $1.4 million, unchanged year-over-year.

• Operating cash flow: $(5.0) million, down from $2.5 million in the prior year.

Outlook and guidance

• Gross margins are expected to remain in the high 30s throughout fiscal 2026 due to elevated green coffee costs.

• No additional price increases are planned in the near term.

• Management expects to fund working capital and capital expenditures for the next 12 months through available credit and cash flows.

• Fiscal 2026 capital expenditures are anticipated to be $9–11 million, financed through operations and credit facility.

• Continued pressure on gross margin and revenue is anticipated for the remainder of the fiscal year.