Farmer Bros. (FARM) - 2026 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Adjusted EBITDA for the quarter was approximately $484,000, a significant decrease from $5.9 million in the prior year period [8] - Net sales decreased by 1% to $88.9 million compared to $90 million during the prior year period [8] - Gross margin was reported at 36.3%, reflecting a decline of 680 basis points compared to the prior year [8] Business Line Data and Key Metrics Changes - Total coffee pounds sold decreased by just under 3% year-over-year [5] - Operating costs for the quarter decreased by $1.4 million to $36.4 million, representing 40.9% of net sales, compared to 42% in the prior year period [9] Market Data and Key Metrics Changes - U.S. consumer confidence fell to its lowest level since May 2014, impacting consumer behavior [5] - National sentiment regarding purchasing power was reported to be more than 20% lower than a year ago [5] Company Strategy and Development Direction - The company aims to drive top-line revenue growth and address customer and coffee pound degradation by leveraging its DSD network and expanding its white label customer portfolio [6] - The company is optimistic about recent reductions in tariff rates and declines in Arabica and Robusta commodity markets, expecting improvements in gross margins starting in the fourth quarter of fiscal 2026 [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment due to higher costs and macroeconomic pressures but expressed confidence in their strategic direction [4] - The company anticipates some relief in gross margins beginning in the fourth quarter of fiscal 2026, with further benefits expected in fiscal 2027 [6] Other Important Information - The company recorded a net loss of $4.9 million in the second quarter, compared to a net income of $200,000 in the same period of fiscal 2025 [9] - As of December 31, 2025, the company had $4.2 million in unrestricted cash and cash equivalents, along with $24.6 million available under its revolving credit facility [10] Q&A Session Summary - No specific questions or answers were provided in the transcript, indicating that the call concluded without a Q&A segment [11]