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LC

Limoneira CO (LMNR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 revenue was $47.5M vs $63.3M in Q3 FY2024; GAAP diluted EPS was -$0.06 vs $0.35 a year ago; adjusted diluted EPS was -$0.02 vs $0.42, reflecting lemon price pressure and lower fresh utilization, partially offset by oranges and steady other operations .
  • Revenue and EPS missed Wall Street consensus; revenue came in at $47.478M vs $50.108M consensus*, and primary EPS (normalized) was -$0.02 actual vs $0.035 consensus*, with adjusted EBITDA of ~$3.0M vs ~$4.34M consensus* .
  • Management reiterated FY2025 fresh lemon volume guidance (4.5–5.0M cartons) and now expects ~7.0M pounds of avocados (narrowed from 7.0–8.0M), and highlighted a strategic sales/marketing transition to Sunkist expected to drive ~$5M annual cost savings and EBITDA uplift beginning FY2026 .
  • Strategic catalysts include the Sunkist partnership (customer access, cost leverage), Harvest at Limoneira distributions (projected $180M over seven years), and exploration of Limco Del Mar housing development in Ventura, which could unlock additional real estate value .

What Went Well and What Went Wrong

What Went Well

  • Oranges grew: Q3 orange revenue increased to $1.7M vs $1.2M YoY; 94k cartons sold at $18.00 per carton vs 43k cartons at $26.98 last year, highlighting volume gains despite lower price per carton .
  • Strategic partnership momentum: Limoneira remains “on track” to merge citrus sales/marketing into Sunkist with ~$5M annual selling/marketing cost savings and EBITDA enhancement starting FY2026, expanding access to high-quality customers .
  • Real estate and water monetization progress: Harvest JV continues to sell ahead of schedule with projected distributions totaling ~$180M over 7 years; $1.7M proceeds from water rights sales booked with $1.5M gain .

Management quotes:

  • “Our new strategic partnership with Sunkist for citrus sales and marketing is expected to drive $5 million in annual cost savings and EBITDA enhancement starting in fiscal 2026, while unlocking access to new, high-quality customers.”
  • “We expect lemons to return to profitability with more normalized lemon prices and fresh utilization levels in fiscal 2026.”
  • “We have 700 acres of non-bearing avocados estimated to become full bearing over the next two to four years… enabling strong organic growth.”

What Went Wrong

  • Lemon pricing and utilization: Fresh packed lemon sales declined to $23.8M vs $25.8M; average price per carton was $17.02 vs $18.43, with lower fresh utilization due to holding inventory to capture late-quarter pricing .
  • Avocado volumes down due to alternate bearing: $8.5M revenue vs $13.9M YoY; 5.654M lbs at $1.50/lb vs 8.855M lbs at $1.57/lb; management expects a bigger volume improvement in 2027 rather than 2026 .
  • Farm management revenue materially lower: $0.1M vs $3.2M YoY after termination of the PGIM farm management agreement effective March 31, 2025 .

Financial Results

Quarterly Performance vs Prior Periods

MetricQ1 2025Q2 2025Q3 2025
Total Net Revenues ($USD Millions)$34.305 $35.119 $47.478
GAAP Diluted EPS ($)-$0.18 -$0.20 -$0.06
Operating Income (Loss) ($USD Millions)-$5.346 -$3.345 -$0.630
Adjusted Diluted EPS ($)-$0.14 -$0.17 -$0.02
Adjusted EBITDA ($USD Millions)-$2.294 -$0.167 $2.974

Q3 2025 vs Prior Year and vs Estimates

MetricQ3 2024Q3 2025 ActualConsensus*Beat/Miss
Total Net Revenues ($USD Millions)$63.305 $47.478 $50.108*Miss
GAAP Diluted EPS ($)$0.35 -$0.06 ——
Primary EPS (Normalized) ($)$0.42 (Adj.) -$0.02 (Adj.) $0.035*Miss
Adjusted EBITDA ($USD Millions)$13.791 $2.974 $4.341*Miss

Note: Values with asterisks (*) retrieved from S&P Global.

Segment Breakdown (Q3 2025 vs Q3 2024)

SegmentQ3 2024 Net Revenues ($M)Q3 2024 Operating Inc ($M)Q3 2025 Net Revenues ($M)Q3 2025 Operating Inc (Loss) ($M)
Fresh Lemons$36.746 $3.769 $28.123 -$1.175
Lemon Packing$15.699 $4.555 $14.556 $1.832
Avocados$13.897 $9.793 $8.488 $4.755
Other Agribusiness$6.006 $0.094 $3.268 $0.722
Total Agribusiness$61.849 $16.412 $45.942 $3.892
Other Operations$1.456 —$1.536 —

KPIs

KPIQ3 2024Q3 2025
U.S. Fresh Lemon Cartons Sold (units)~1,400,000 ~1,397,000
Avg Price per Lemon Carton ($)$18.43 $17.02
Brokered/Other Lemon Sales ($M)$9.8 $3.8
Avocado Pounds Sold (lbs)~8,855,000 ~5,654,000
Avg Avocado Price ($/lb)$1.57 $1.50
Orange Cartons Sold (units)~43,000 ~94,000
Avg Orange Price ($/carton)$26.98 $18.00

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Fresh Lemon VolumeFY20254.5–5.0M cartons 4.5–5.0M cartons Maintained
Avocado VolumeFY20257.0–8.0M lbs ~7.0M lbs Lowered (narrowed)
Sunkist Transition SavingsFY2026 onward~$5M annual savings/EBITDA uplift ~$5M annual savings/EBITDA uplift Maintained
Harvest Distributions (Projected)2024–2030$15 (2024), $10 (2025), $16 (2026), $34 (2027), $41 (2028), $22 (2029), $42 (2030) ($M) Same schedule reiterated Reiterated
DividendQ3 2025—$0.075 per share payable July 18, 2025 Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 FY2025)Current Period (Q3 FY2025)Trend
Lemon Pricing/UtilizationOversupply and pricing pressure; asset-lighter model focus Pricing rebounded in August into low-$20s; held lemons longer to capture late-quarter pricing Improving entry point into FY2026
Avocado ProductionStrong pricing in Q2; alternate bearing lowers FY2025 volume FY2026 likely similar-to-less vs FY2025; major volume ramp expected in 2027 with 700 non-bearing acres maturing Near-term flat; medium-term growth
Sunkist PartnershipAnnounced plan to merge citrus sales/marketing; expected ~$5M annual savings from FY2026 On track; expected EBITDA enhancement and customer access Cost/market access catalyst FY2026
Real Estate (Harvest)Phase 2 sell-out; projections $180M over 7 years Continued sales ahead of schedule; cash distributions ongoing ($10M received Apr 2025) Steady, supports liquidity
Water Monetization$1.7M proceeds and $1.5M gain booked in Jan 2025 Reiterated gains; continued exploration Ongoing monetization
Limco Del Mar Housing—Announced exploration of 221-acre housing development; entitlement process outlined New real estate option value

Management Commentary

  • CEO: “We expect lemons to return to profitability with more normalized lemon prices and fresh utilization levels in fiscal 2026.”
  • CEO: “Our new strategic partnership with Sunkist… expected to drive $5 million in annual cost savings and EBITDA enhancement starting in fiscal 2026, while unlocking access to new, high-quality customers.”
  • CFO: “Our average price in the quarter in Q3 was just over $17. August, we saw prices in the low $20s…”
  • CEO: “We have 700 acres of non-bearing avocados estimated to become full bearing over the next two to four years… enabling strong organic growth.”
  • CEO: On Limco Del Mar: a “community-based planning process” with CEQA, SOAR vote, and LAFCO annexation, with significant value trigger at entitlement and in development .

Q&A Highlights

  • Limco Del Mar costs: Expected $3–$5M over 3–5 years, largely capitalized; significant value realized at entitlement, then during development; partnership options (e.g., Lewis) remain open .
  • Lemon pricing normalization: Management cited supply constraints in Turkey and Spain, with more imports diverted to Europe; expects prices with “a two in front of it” and improved stability with Sunkist contracted business, including QSR customers .
  • Avocado outlook: FY2026 volumes likely similar-to-less than FY2025; more material volume uplift targeted for FY2027 .
  • Guidance clarifications: FY2025 lemons reiterated 4.5–5.0M cartons; avocados ~7.0M lbs due to alternate bearing .

Estimates Context

  • Q3 FY2025 revenue missed consensus at $47.478M vs $50.108M*; primary EPS (normalized) was -$0.02 vs $0.035*, and adjusted EBITDA of ~$2.974M vs ~$4.341M* .
  • Q4 FY2025 consensus implies seasonally softer quarter: revenue $35.967M*, EPS -$0.1167*, EBITDA ~$0.377M*.
  • With Sunkist transition and lemon pricing stabilization into FY2026, Street models may need to reflect improved unit economics and reduced SG&A, while avocado volume trajectory likely shifts larger uplift to FY2027 rather than FY2026 .

Note: Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term headwinds persisted in Q3 (lemon pricing/fresh utilization; avocado alternate bearing), driving YoY declines; Q4 is seasonally softer, and FY2025 EPS likely pressured .
  • FY2026 setup strengthens materially: Sunkist partnership should add ~$5M annual savings and EBITDA uplift, alongside more normalized lemon pricing and contracted customer mix; monitor FY2026 lemon volumes and margin recovery .
  • Medium-term growth from avocados: 700 non-bearing acres maturing in 2–4 years and plans to expand plantings support a larger volume step-up beginning FY2027; aligns with favorable demand trends .
  • Real estate cash flows provide ballast: Harvest distributions ($180M over seven years) and potential Limco Del Mar entitlement create incremental optionality and liquidity to fund operations and growth .
  • Balance sheet watch: Net debt rose to ~$61.3M at Q3; JV cash of ~$36.4M supports distributions; track covenant compliance and interest expense amid rate environment .
  • Trading lens: Near-term results missed consensus; stock reaction likely hinges on confidence in lemon price normalization and visibility on Sunkist-driven cost leverage; catalysts include FY2026 transition milestones and Limco Del Mar entitlement updates .
  • Dividend continuity: $0.075/share declared in June suggests ongoing commitment to shareholder returns despite interim volatility .