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

Written by Emily J. Thompson, Senior Investment Analyst

Source: SeekingAlpha

Updated: Sep 11 2025

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Source: SeekingAlpha

Gross Margins Gross margins were above 43% for the year, a year-over-year improvement of 420 basis points. The fourth quarter gross margin was 44.9%, a year-over-year increase of 610 basis points. This improvement was attributed to a proactive pricing strategy that stayed ahead of rising green coffee market prices.

Adjusted EBITDA Adjusted EBITDA for the fourth quarter was $5.8 million and $14.8 million for the full fiscal year, representing a year-over-year improvement of more than $7 million for the quarter and more than $14 million for the full fiscal year. This improvement was driven by operational efficiencies and cost structure optimization.

Net Sales Net sales during the fourth quarter were $85.1 million compared to $84.4 million in the prior year period. For the full fiscal year, net sales were $342.3 million compared to $341.1 million in the prior year, showing a slight increase. The increase was modest due to challenges in the coffee market and consumer purchasing patterns.

Operating Expenses Operating expenses increased by $14.3 million to $150.4 million for the year, primarily due to a $20.2 million year-over-year decrease in net gains from asset sales. Excluding asset sales, operating expenses decreased by $6 million, reflecting progress in driving efficiencies in the SG&A cost structure.

Net Loss Net loss for the fourth quarter was $4.7 million compared to $4.6 million in the prior year. For the full fiscal year, the net loss was $14.5 million compared to $3.9 million in the prior year. The increase in net loss was due to noncash losses of $7.7 million related to pension settlements and a $20.2 million decrease in net gains on asset sales.

Free Cash Flow Free cash flow for the fourth quarter was $7.5 million and $6.5 million for the full fiscal year, representing a year-over-year increase of $12.1 million for the quarter and $34.5 million for the full fiscal year. This improvement was driven by better operating performance, improved working capital management, and CapEx efficiency.

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FARM

$1.73+Infinity%1D

Analyst Views on FARM

Wall Street analysts forecast FARM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for FARM is 2.25 USD with a low forecast of 1.50 USD and a high forecast of 3.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

2 Analyst Rating

1 Buy

1 Hold

0 Sell

Moderate Buy

Current: 1.700

Low

1.50

Averages

2.25

High

3.00

Current: 1.700

Low

1.50

Averages

2.25

High

3.00

Roth Capital

Buy

downgrade

$3

2025-11-28

Reason

Roth Capital

Price Target

$3

AI Analysis

2025-11-28

downgrade

Buy

Reason

Roth Capital lowered the firm's price target on Farmer Bros. to $3 from $3.50 and keeps a Buy rating on the shares. The company continues to streamline operations to maximize profitability and implement metrics to drive growth, but the headwinds from reduced restaurant traffic and higher coffee prices likely dent growth and margins in the near term, the analyst tells investors in a research note.

Roth Capital

Buy

downgrade

$3

2025-11-26

Reason

Roth Capital

Price Target

$3

2025-11-26

downgrade

Buy

Reason

Roth Capital lowered the firm's price target on Farmer Bros. to $3 from $3.50 and keeps a Buy rating on the shares following the fiscal Q1 report. The company is streamlining operations to maximize profitability but faces near-term headwinds from reduced restaurant traffic and higher coffee prices, the analyst tells investors in a research note. It sees these near term dynamics impacting Farmer Bros.' results in the near term.

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About FARM

Farmer Bros. Co. is a coffee roaster, wholesaler, equipment servicer and distributor of coffee, tea and culinary products. Its product lines include organic, Direct Trade and sustainably produced coffee, as well as tea, cappuccino mixes, spices and baking/biscuit mixes. It delivers beverage-planning services and culinary products to a variety of U.S.-based customers, ranging from small independent restaurants and foodservice operators to institutional buyers, such as restaurant, department and convenience store chains, hotels, casinos, healthcare facilities and gourmet coffee houses, as well as grocery chains with private brand coffee and consumer branded coffee and tea products and foodservice distributors. Its primary brands include Farmer Brothers, Boyd’s, Cain’s, China Mist and West Coast Coffee. It distributes its products from its Portland, Oregon production facility, as well as separate distribution centers in Northlake, Illinois; Moonachie, New Jersey, and Rialto, California.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.