Limoneira Earnings: Revenue Decline, Strategic Shift to Sunkist Partnership
- Hardik Shah
- 2 days ago
- 3 min read
TLDR
Revenue Strength: Q3 revenue fell 25% YoY to $47.5M, pressured by weaker lemon and avocado sales.
Margin Trends: Adjusted EBITDA dropped to $3.0M from $13.8M; net loss of $1.0M.
Forward Outlook: Reiterated lemon and avocado volume targets; expects $5M in cost savings from Sunkist partnership in FY2026.
Business Overview
Limoneira Company (Nasdaq: LMNR), headquartered in Santa Paula, California, is a 132-year-old integrated agribusiness and real estate operator. The company grows, packs, markets, and sells citrus (lemons, avocados, specialty citrus, and oranges) across the U.S. and international markets. Beyond agriculture, Limoneira monetizes land and water assets through joint ventures like Harvest at Limoneira and explores new housing developments in Ventura County, California. Its global footprint spans 10,500 acres across California, Arizona, Chile, and Argentina.
Limoneira Earnings
Revenue: Total Q3 revenue was $47.5M, down from $63.3M last year. Agribusiness revenue fell to $45.9M, with lemons contributing $23.8M and avocados $8.5M, both below prior year levels.
Margins & Profitability: Operating loss was $0.6M vs. income of $9.0M a year ago. Net loss was $1.0M ($0.06 per diluted share), compared to net income of $6.5M ($0.35 EPS). Adjusted net loss was $0.4M, or $0.02 per share. Adjusted EBITDA declined sharply to $3.0M from $13.8M in Q3 2024.
Drivers: Results reflected persistent lemon pricing pressures and lower avocado volumes due to the crop’s alternate bearing cycle, partly offset by stronger orange sales.
Forward Guidance
Management Outlook: Limoneira reiterated fresh lemon volume of 4.5M–5.0M cartons and avocado volume of ~7.0M pounds for FY2025.
Risks & Opportunities: Management expects lemons to rebound in FY2026 as international supply shortages (Turkey, Spain) support pricing stability. Avocado expansion—700 acres of nonbearing trees set to mature in 2–4 years—offers a near-doubling of avocado-producing acreage.
CEO Harold Edwards noted: “We expect lemons to return to profitability with more normalized pricing and fresh utilization levels in fiscal year 2026. Our avocado business continues to expand, with pricing and volume on plan during the quarter.”
Operational Performance
Citrus Sales & Marketing: The company announced the integration of citrus sales with Sunkist Growers, a move forecasted to generate $5M in annual cost savings and EBITDA uplift starting in FY2026.
Real Estate Development: Harvest at Limoneira continues to sell homes ahead of schedule, with distributions of $10M in April 2025 and projections of ~$155M in cash flow over the next five years.
Housing Initiative: Limoneira is exploring development of its 221-acre Limco Del Mar Ranch, aiming to address Ventura County’s housing shortage.
Edwards emphasized: “The Limco Del Mar Ranch is ideally suited for efficient, well-planned infill development that may stimulate economic growth, create jobs and contribute to vibrant livable communities.”
Market Insights
The citrus industry remains challenged by supply-demand imbalances. Lemon prices averaged $17.02/carton in Q3 (vs. $18.43 YoY) but rose into the low $20s in August, driven by supply shortages in Spain and Turkey.
CFO Mark Palamountain explained: “August, we saw prices in the low 20s, almost a $4 to $5 jump… Next year, we see Spain and Turkey being short 20% to 30%, which then allows some of our Southern Hemisphere friends to move fruit there. And I think you’ll see a price with a two in front of it.”
Consumer Behavior & Sentiment
Despite ongoing inflationary pressures, consumer demand for avocados remains robust. Limoneira sees sustained demand from quick-serve restaurant customers, supported by its expanded distribution through Sunkist channels.
Strategic Initiatives
Avocado Expansion: Additional 500 acres of avocado planting planned through FY2027, aligning with strong consumer demand trends.
Asset Monetization: Continued sale of water rights and land divestitures expected to generate incremental shareholder returns.
Partnership Leverage: The Sunkist partnership is central to stabilizing citrus operations and securing new contracted business.
Capital Allocation
Liquidity: Net debt rose to $61.3M at July 31, 2025, versus $40M in FY2024. Cash on hand was $2.1M.
Distributions: The company expects to receive $180M from Harvest JV projects over seven years, with $25M received in FY2024–2025.
Dividends & Buybacks: No new announcements on dividends or share repurchases this quarter.
The Bottom Line
Limoneira’s Q3 highlighted the pressures of volatile citrus pricing and avocado seasonality, but management remains confident in a return to profitability in FY2026.
Key investor watchpoints include:
Execution of Sunkist integration for $5M EBITDA uplift.
Avocado acreage expansion and timing of maturation in 2027.
Real estate monetization milestones, particularly Limco Del Mar entitlements and Harvest distributions.
The company’s dual-pronged strategy—agriculture optimization and land monetization—positions it for both near-term resilience and long-term shareholder value creation.
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