Farmer Bros. Co. FARM reported second-quarter fiscal 2025 results, with the top line increasing year over year but missing the Zacks Consensus Estimate. Meanwhile, the bottom line declined year over year but beat the consensus mark. 

The company achieved improvements in sales while maintaining gross margins above 43% for the second consecutive quarter. FARM’s primary focus remains on driving top-line growth, expanding coffee volume and growing its customer base while enhancing operational efficiency. With significant progress in DSD operations and business optimization in the past 18 months, Farmer Bros believes it is well-positioned for long-term growth and profitability as market conditions stabilize.

FARM’s Quarterly Performance: Key Insights

Farmer Bros posted quarterly earnings of 1 cent per share, surpassing the Zacks Consensus Estimate of a loss of 12 cents. However, the bottom line declined from 13 cents reported in the prior-year period.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The company generated net sales of $90 million, which was down from the Zacks Consensus Estimate of $91 million. However, the metric increased 0.6% from the year-ago period. 

The gross profit was $38.8 million compared with $36.1 million reported in the year-ago period. The gross margin increased 270 basis points to 43.1%, driven primarily by improved pricing.

Operating expenses of $37.8 million increased from $31.7 million in the prior-year quarter, due to a $7.7 million decline in net gains from asset disposals, as no branch sales occurred in the second quarter of fiscal 2025.

The adjusted EBITDA was $5.9 million, up from $2.3 million reported in the year-ago period.

FARM’s Financial Health Snapshot

Farmer Bros ended the quarter with unrestricted cash and cash equivalents of $5.5 million, restricted cash of $0.2 million, outstanding borrowings of $23.3 million and borrowing availability under its revolving credit facility of $23.7 million. 

For the six months ended Dec. 31, 2024, Farmer Bros’ cash provided by operating activities was $5 million and capital expenditures were $5.4 million.

Shares of this Zacks Rank #3 (Hold) company have risen 5.3% in the past three months compared with the industry's growth of 7.5%.

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Stocks to Consider

United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for United Natural Foods’ current financial-year sales and earnings indicates growth of 0.3% and 442.9%, respectively, from the year-ago period’s reported figure. UNFI delivered a trailing four-quarter earnings surprise of 553.1%, on average.

TreeHouse Foods THS manufactures and distributes private brands of snacks and beverages in the United States and internationally. It presently holds a Zacks Rank #2 (Buy). THS delivered a trailing four-quarter earnings surprise of 20.4%, on average.

The Zacks Consensus Estimate for Treehouse Foods’ current-quarter earnings indicates growth of 26% from the year-ago reported figures.

US Foods Holding USFD engages in marketing, sale and distribution of fresh, frozen and dry food and non-food products to food-service customers in the United States. It currently carries a Zacks Rank #2. USFD delivered an earnings surprise of 3.7% in the last reported quarter.

The consensus estimate for US Foods’ current full-year sales and earnings indicates growth of 6.5% and 18.6%, respectively, from the prior-year reported levels.

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