Farmer Bros Co delivered a solid margin expansion in Q4 2024 amid an ongoing restructuring designed to optimize the value chain and simplify the product portfolio. Net sales for the quarter were $84.4 million, down slightly year over year by 1.0% but with gross margins expanding to 38.8% (vs. 32.5% in the prior-year period), yielding a quarterly gross profit of $32.8 million. Management attributes the gross margin uplift to pricing optimization and a more favorable product mix following the company’s strategic shift to a direct-store-delivery (DSD) model and the centralization of roasting/production activities. Despite the improved gross margin, the company reported a net loss of $4.59 million in Q4 2024, with an EPS of -$0.22, reflecting ongoing fixed-cost absorption and selling expenses associated with the transition and SKU rationalization process.
Over the full year 2024 Farmer Bros posted net sales of $341.1 million, up modestly from $340.0 million in 2023, and achieved gross margins of 39.3% (vs. 33.7% in 2023), driven by pricing actions and a more favorable mix. Full-year adjusted EBITDA turned positive at $0.56 million, a meaningful improvement from a $14.2 million loss in 2023, underscoring the early effectiveness of cost-control and revenue-management initiatives. However, net income remained negative for the year, with continued emphasis on deleveraging and cash-flow generation.
Management highlighted several forward-looking priorities that underpin the recovery path: (1) completing the DSD optimization and footprint optimization to deliver meaningful savings in fiscal 2025, (2) continuing SKU rationalization and brand pyramid consolidation, including the planned specialty tier launch later in 2024/early 2025, (3) advancing product innovation (SHOTT syrups and Boyd’s Liquid Ambient) to broaden addressable markets and strengthen profitability among higher-value customers, and (4) a disciplined focus on working capital and capital expenditure management to reach positive free cash flow. Management emphasized that while the transformation takes time, the gross-margin and adjusted-EBITDA gains already realized point to a sustainable improvement trajectory and a stronger foundation for long-term value creation.