Limoneira Q2 2020 Earnings Report
Key Takeaways
Limoneira Company reported a decrease in total revenue for Q2 2020, despite an increase in fresh lemon volume. The COVID-19 pandemic significantly reduced lemon prices due to oversupply and reduced overseas shipments. Avocado and orange revenues increased, and real estate development project sales progressed as expected.
Fresh lemon volume increased by 13.5% but was offset by lower prices due to COVID-19 impacts.
Total net revenue decreased to $39.6 million compared to $42.0 million in the prior year quarter.
Avocado and orange revenues increased compared to the same period last year.
Company expects record lemon volumes for fiscal year 2020.
Limoneira
Limoneira
Forward Guidance
Limoneira withdrew its fiscal year 2020 outlook due to the uncertainty caused by the COVID-19 pandemic, but expects record lemon volumes and improved adjusted EBITDA in the second half of the year.
Positive Outlook
- Expects record lemon volumes for fiscal year 2020.
- Anticipates improvement in adjusted EBITDA during the second half of 2020.
- Improved sell-through results during the month of May compared to March and April due to seasonality.
- Foodservice businesses are beginning to open in certain areas of the United States.
- Company has an additional 1,200 acres of non-bearing lemons estimated to become full bearing over the next four years.
Challenges Ahead
- COVID-19 pandemic has had an adverse impact on the industries and markets the Company serves.
- United States lemon market has seen a significant decline in volume.
- Overall lemon demand has fallen since widespread shelter in place orders were issued in mid-March 2020, resulting in significant market oversupply.
- Export market for fresh product has also significantly declined due to COVID-19 impacts.
- Decline in foodservice business from closures of full-service restaurants, quick service restaurants and bar business due to COVID-19.