Farmer Bros. Co. 2022 QI net sales rise 11.4%

Nov. 18, 2021

Farmer Bros. Co. reported $108.4 million net sales for its first quarter of fiscal 2022, ended Sep. 30, an increase of $11.1 million, or 11.4%, from the prior year period.

Founded in 1912, Farmer Bros. Co. is a national coffee roaster, wholesaler and distributor of coffee, tea and culinary products.

The coffee company said the increase was driven primarily by continued recovery from the COVID-19 pandemic as local governments across the country eased restrictions and vaccines were distributed and rolled out successfully.

During the quarter, the company's average weekly DSD sales were down 25%, compared with pre-COVID levels, which represents continued improvement from the quarter ended Jun.30, 2021, and quarter ended Sept.30, 2020 when sales were down 27% and 41%, respectively.

The company's direct ship channel sales declined 5.7% during the three months ended September 30, 2021 compared to the prior year period. This was due to accounts we decided to exit during fiscal 2021 because they resulted in lower or negative profit due to the impacts from COVID-19 on their business. These declines were partially offset by the recovery from the COVID-19 impact of some of our other direct ship customers.

Farmer's profit in the first quarter of fiscal 2022 was $31.5 million, an increase of $9.1 million, or 40.3% from the prior year gross profit of $22.4 million, and gross margin increased 6% to 29%, compared with 23% a year ago.

Profit improvement was mostly due to the effect of the continued recovery from COVID-19 on the DSD channel sales since our DSD channel has higher margins. The increase was also attributable to a decline in its unfavorable production variances and inventory scrap write-downs due to the closure of our aged Houston, Texas plant during fiscal 2021.