Core Points - The company has filed its Form 10-Q and released its first quarter results for Fiscal Year 2026, which are accessible on its Investor Relations website [2] - The financial information presented during the call is unaudited, and management's remarks may include forward-looking statements that should not be relied upon for future expectations [3] - Management will reference non-GAAP financial measures such as adjusted EBITDA and adjusted EBITDA margin to assess operating performance, with reconciliations provided in the company's release and SEC filings [4]

Core Insights - Farmer Brothers reported a quarterly loss of $0.19 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.09, marking an earnings surprise of -111.11% [1] - The company's revenues for the quarter ended September 2025 were $81.6 million, missing the Zacks Consensus Estimate by 4.34% and down from $85.07 million a year ago [2] - Farmer Brothers has underperformed the market, with shares down about 2.2% year-to-date compared to the S&P 500's gain of 15.6% [3] Financial Performance - Over the last four quarters, Farmer Brothers has surpassed consensus EPS estimates two times [2] - The current consensus EPS estimate for the upcoming quarter is -$0.09 on revenues of $91.5 million, and for the current fiscal year, it is -$0.44 on revenues of $354.5 million [7] Industry Context - The Food - Natural Foods Products industry, to which Farmer Brothers belongs, is currently in the bottom 8% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Farmer Brothers' stock performance [5][6]

Financial Data and Key Metrics Changes - Revenue decreased by 4% to $81.6 million compared to $85.1 million in the prior year period [4][11] - Adjusted EBITDA remained flat year-over-year at $1.4 million [4][11] - Gross margins were approximately 39.7%, a decline of about 400 basis points from the previous year [12] - Operating expenses decreased by $4.5 million to $35.6 million, representing 43.6% of net sales compared to 47.2% in the prior year [12] Business Line Data and Key Metrics Changes - The company is focusing on reenergizing its Direct Store Delivery (DSD) network through sales and operational initiatives [5] - There is a renewed focus on growing the white label customer portfolio, leveraging the Portland roasting and manufacturing facility [5][6] Market Data and Key Metrics Changes - The average price of a cup of coffee has increased by 20% compared to the previous year, impacting consumer spending [7] - The National Restaurant Association reported a decline in restaurant foot traffic for the seventh consecutive month, indicating a shift in consumer dining habits due to economic uncertainty [7] Company Strategy and Development Direction - The company aims to drive top-line revenue and address customer and coffee pound degradation in fiscal 2026 [4] - There is a commitment to leveraging core coffee capabilities and enhancing customer service while managing costs [14] - The company is working with industry organizations to seek exemptions from tariffs on coffee imports [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges significant challenges due to unprecedented green coffee market conditions and inflation impacting costs [11] - The company expects continued pressure on gross margins and revenue performance throughout fiscal 2026 [10][12] - Despite these challenges, management remains optimistic about creating shareholder value once market conditions improve [10][14] Other Important Information - The company recorded a net loss of $4 million for the quarter, an improvement from a $5 million net loss in the prior year [12] - As of September 30, 2025, the company had $3.8 million in unrestricted cash and $31.2 million available under its revolving credit facility [12] Q&A Session Summary - There were no questions during the Q&A session, and the call concluded without any inquiries [16]

Financial Performance - Net sales for the three months ended September 30, 2025, decreased by $3.5 million, or 4.1%, to $81.6 million compared to $85.1 million in the same period of 2024[110]. - Gross profit decreased to $32.4 million for the three months ended September 30, 2025, down from $37.3 million in the prior year, with gross margin declining to 39.7% from 43.9%[112]. - Net loss for the three months ended September 30, 2025, was $4.0 million, a 19.5% improvement from a net loss of $5.0 million in the same period of 2024[109]. - EBITDA improved by $0.7 million to a loss of $0.8 million for the three months ended September 30, 2025, compared to a loss of $1.4 million in the prior year[105]. - For the three months ended September 30, 2025, the company reported a net loss of $4.025 million, an improvement from a net loss of $5.002 million in the same period of 2024[123]. - Adjusted EBITDA for the three months ended September 30, 2025, was $1.364 million, compared to $1.417 million in 2024, with an Adjusted EBITDA Margin of 1.7% for both periods[124]. Operating Expenses - Operating expenses decreased by $4.5 million to $35.6 million, representing 43.6% of net sales, down from 47.2% in the prior year[113]. - Selling expenses decreased by $1.4 million, while general and administrative expenses decreased by $2.5 million in the three months ended September 30, 2025[113]. - Interest expense decreased by $0.5 million to $1.3 million for the three months ended September 30, 2025, primarily due to lower pension-related interest costs[115]. Sales and Pricing - Average unit price increased by 7.7% while unit sales decreased by 10.9% in the three months ended September 30, 2025, contributing to the overall decline in net sales[111]. - The company did not introduce any new product categories that materially impacted net sales during the three months ended September 30, 2025[111]. Cash Flow and Capital Expenditures - Net cash used in operating activities was $5.007 million for the three months ended September 30, 2025, a decrease of $7.5 million compared to net cash provided of $2.493 million in 2024[138]. - Total capital expenditures for the three months ended September 30, 2025, were $1.9 million, a decrease of 42.0% from $3.3 million in the prior year[105]. - Capital expenditures for the three months ended September 30, 2025, were $1.9 million, down from $3.3 million in the same period of 2024[141]. - The company anticipates paying between $9.0 million to $11.0 million in capital expenditures in fiscal 2026, financed through cash flows from operations and borrowings[141]. Inventory and Borrowings - The company had outstanding borrowings of $18.3 million on its Revolver Credit Facility as of September 30, 2025, with a weighted average interest rate of 6.15%[132]. - The company had committed to purchase green coffee inventory totaling $31.6 million under fixed-price contracts as of September 30, 2025[143]. - As of September 30, 2025, the company had $3.8 million in unrestricted cash and cash equivalents, and $31.2 million available on its Revolver Credit Facility[136]. Market Conditions - The company continues to monitor macroeconomic trends, including product cost inflation and tariff impacts, which may adversely affect net sales and profitability[130]. - The company operates a nationwide DSD network with over 200 delivery routes and over 90 storage locations as of September 30, 2025[129].

Financial Performance - Net sales for the first quarter of fiscal 2026 were $81.6 million, a decrease of $3.5 million, or 4.1%, compared to the first quarter of fiscal 2025[10] - Gross profit was $32.4 million, representing a gross margin of 39.7%, down from 43.9% in the same quarter last year[10] - The company reported a net loss of $4 million for the first quarter of fiscal 2026, an improvement from a net loss of $5 million in the first quarter of fiscal 2025[10] - Adjusted EBITDA remained flat at $1.4 million for both the first quarter of fiscal 2026 and the first quarter of fiscal 2025[10] - Operating expenses decreased to $35.6 million, or 43.6% of net sales, compared to $40.1 million, or 47.2%, in the first quarter of fiscal 2025[10] - Net loss for the three months ended September 30, 2025, was $4,025,000, an improvement from a net loss of $5,002,000 in the same period of 2024[20] - EBITDA for the same period was $(751,000), compared to $(1,408,000) in 2024, resulting in an EBITDA margin of (0.9)%[26] - Adjusted EBITDA for the three months ended September 30, 2025, was $1,364,000, consistent with an Adjusted EBITDA margin of 1.7%[28] Cash Flow and Assets - The company had $3.8 million in unrestricted cash and cash equivalents as of September 30, 2025[5] - Cash flows from operating activities showed a net cash used of $5,007,000, a decline from net cash provided of $2,493,000 in 2024[20] - Cash and cash equivalents at the end of the period were $3,999,000, down from $5,138,000 at the end of the same period in 2024[20] - The company experienced a net decrease in cash and cash equivalents of $2,975,000, compared to a decrease of $867,000 in the prior year[20] - As of September 30, 2025, total assets were $158.8 million, a decrease from $161.2 million as of June 30, 2025[18] Strategic Initiatives - Farmer Brothers announced a partnership with Eurest to open 50 Sum>One Coffee Roasters-branded cafes across the country[10] - The company maintained a focus on driving top-line revenue and customer growth in 2026 despite a challenging economic environment[3] - The company incurred $587,000 in strategic initiative costs during the quarter, which were not present in the previous year[28] Expenses - There was a nearly $4 million improvement in sales, general, and administrative (SG&A) expenses compared to the first quarter of fiscal 2025[10] - Depreciation and amortization expense for the quarter was $2,614,000, compared to $2,897,000 in 2024[26] - The company reported a net cash used in investing activities of $1,919,000, an improvement from $3,304,000 in the prior year[20] - Proceeds from credit facilities amounted to $4,000,000, compared to $3,000,000 in the same period of 2024[20]

Core Insights - Farmer Brothers Coffee Co. reported a net loss of $4 million for the first quarter of fiscal 2026, an improvement from a net loss of $5 million in the same period last year [8][14] - Net sales decreased by 4.1% year-over-year to $81.6 million, down from $85.1 million [8][14] - The gross margin decreased by 400 basis points year-over-year to 39.7%, compared to 43.9% in the first quarter of fiscal 2025 [8][14] Financial Performance - Adjusted EBITDA remained flat at $1.4 million for the first quarter of fiscal 2026, consistent with the previous year [8][14] - Operating expenses were reduced to $35.6 million, or 43.6% of net sales, down from $40.1 million, or 47.2% of net sales, in the first quarter of fiscal 2025 [8][14] - The company achieved a gross profit of $32.4 million in the first quarter of fiscal 2026, compared to $37.3 million in the same quarter of fiscal 2025 [8][14] Operational Highlights - The company realized a nearly $4 million improvement in sales, general, and administrative (SG&A) expenses compared to the first quarter of fiscal 2025 [8] - Farmer Brothers announced a partnership with Eurest to open 50 Sum>One Coffee Roasters-branded cafes across the country [8] - The company emphasized its focus on driving top-line revenue and customer growth in fiscal 2026 [3][8] Balance Sheet and Liquidity - As of September 30, 2025, Farmer Brothers had $3.8 million in unrestricted cash and cash equivalents, with an additional $31.2 million available under its revolving credit facility [5][8] - Total current assets amounted to $87.3 million, while total liabilities were reported at $118.8 million [16][17] Market Position - Farmer Brothers Coffee Co. is a national coffee roaster and distributor, serving a diverse range of customers including independent restaurants, foodservice operators, and large institutional buyers [9] - The company's product lines include organic, Direct Trade, and sustainably produced coffee, as well as tea and culinary products [9]

Core Insights - Farmer Brothers Coffee Co. will release its first quarter 2026 financial results on November 6, 2025, after market close [1] - An audio-only investor conference call will be held on the same day at 5 p.m. Eastern to discuss the quarterly results and provide a business update [2] Company Overview - Founded in 1912, Farmer Brothers Coffee Co. is a national coffee roaster, wholesaler, and distributor of coffee, tea, and culinary products [3] - The company offers a variety of products including organic, Direct Trade, and sustainably produced coffee, as well as tea and culinary mixes [3] - Farmer Brothers serves a diverse customer base, including independent restaurants, large institutional buyers, and grocery chains [4] Product and Service Offerings - The company provides extensive beverage planning services and culinary products to various U.S.-based customers [4] - Key brands under Farmer Brothers include Farmer Brothers, Boyd's Coffee, SUM>ONE Coffee Roasters, West Coast Coffee, Cain's, and China Mist [4]

Group 1 - The focus has shifted towards offshore drilling, supply industry, and shipping, including tankers, containers, and dry bulk [1] - The fuel cell industry is being monitored as it is still in its early stages of development [1] Group 2 - The individual has extensive experience in navigating significant market events such as the dotcom bubble, the aftermath of the World Trade Center attacks, and the subprime crisis [2] - The individual has a background in auditing with PricewaterhouseCoopers before transitioning to day trading [2]

Core Insights - Pop Mart International Group's Labubu doll series is experiencing declining popularity in mainland China, leading to a significant drop in the net worth of its founder, Wang Ning, by nearly $6 billion in less than a month [1][2]. Company Performance - Wang Ning's current net worth stands at $21.6 billion, down from $27.5 billion in late August, reflecting a shift in market sentiment and consumer interest [2]. - Pop Mart's shares have fallen over 20% since the release of the Labubu 4.0 series on August 28, which retails for 79 yuan ($11) each [3][5]. - The transaction price for the latest Labubus has decreased by 14.3% to 150 yuan each post-release, raising concerns about demand and growth outlook [4]. Investor Sentiment - Investor sentiment has been negatively impacted by JPMorgan Chase's downgrade of Pop Mart's stock to neutral, citing declining product popularity, which resulted in a 6.4% drop in share price [5]. - A spokesperson from Pop Mart attributed the price decline in resale markets to increased production aimed at meeting consumer demand, suggesting that greater accessibility may have influenced pricing [6]. Future Outlook - Despite recent setbacks, Pop Mart's stock is still up over 180% year-to-date, although growth may slow down in 2026 due to a high base effect [7]. - Wang Ning had previously forecasted that Pop Mart could achieve 30 billion yuan in sales for the year, following a nearly 400% rise in profit in the first half of the year [7].

Financial Data and Key Metrics Changes - Fiscal 2025 showed significant operational and financial improvements with gross margins above 43% and a more than $14 million year-over-year improvement in adjusted EBITDA [4][12] - 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 [12][14] - Gross margin in the fourth quarter was 44.9%, a year-over-year increase of 610 basis points, while for the full fiscal year, gross margins were 43.5%, a 420 basis point increase compared to the prior year [12][13] - Net sales during the fourth quarter were $85.1 million compared to $84.4 million during the prior year period, with full fiscal year net sales slightly up to $342.3 million compared to $341.1 million in the prior year [13][14] - Operating expenses increased by $14.3 million to $150.4 million for the year, primarily due to a decrease in net gains related to asset sales [14][15] - 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 [16] Business Line Data and Key Metrics Changes - The company launched the SOME1 specialty brand, which has shown encouraging early responses and opportunities in the pipeline [4][5] - Total coffee volumes decreased by 10% year-over-year to just shy of 20 million lbs in 2025, reflecting challenges in the coffee industry [8][9] Market Data and Key Metrics Changes - The U.S. food services sector experienced weaker growth than during the COVID-19 pandemic, with restaurants and bars seeing one of the weakest six-month periods of sales growth in the past decade [8][9] - Green coffee prices rose over 65% in the past year, contributing to a challenging market environment [9][10] Company Strategy and Development Direction - The company is focused on driving top-line revenue growth, increasing coffee volumes, and enhancing customer retention and expansion efforts [17] - A strategy committee has been formed to explore growth opportunities, with a commitment to addressing customer and coffee pound degradation [10][11] - The company aims to leverage its DSD network to drive product penetration and acquire new customers [10][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant challenges in the macroeconomic environment and the coffee industry, including rising costs and potential tariffs [9][10] - Despite these challenges, management expressed confidence in the company's ability to generate long-term value for shareholders under more favorable market conditions [16][17] Other Important Information - The company made meaningful progress in strengthening its balance sheet, ending the year with $6.8 million of unrestricted cash and a $10 million decrease in net debt [15][16] - The Revive services team was fully reintegrated into field operations to enhance customer service and retention efforts [6][7] Q&A Session Summary Question: Congratulations on the execution over the past year - Management appreciated the acknowledgment of their efforts in a tough macro backdrop [20][21] Question: Areas of focus for operational efficiency and margin improvements - Management indicated a pivot from pricing action to performance and execution, emphasizing customer-focused service [22][23] Question: Customer churn levels and order fulfillment progress - Management reported significant improvements in order fulfillment and addressed challenges in customer churn due to macroeconomic factors [25][27] Question: Opportunities to drive better penetration and stabilize volumes - Management acknowledged the difficult macro environment but emphasized the potential for growth through engagement with larger restaurant groups and improved service levels [35][36] Question: Traction with larger restaurant groups - Management confirmed existing work with larger restaurant groups and the opportunity for growth in that area [39][40] Question: Ability to focus on larger restaurant groups with new leadership - Management affirmed that the new leadership structure allows for more focused efforts on larger restaurant groups [42][43] Question: Opportunities to leverage allied products - Management indicated that allied goods are a significant part of the business and that they are always looking to drive interest in specific segments [45][46]