Limoneira Company (LMNR) Q2 FY26 earnings call: guidance and Q&A

How much avocado volume was pushed from Q2 to Q3, and what are the current market prices for avocados?

Approximately 500,000 pounds of avocado volume were pushed from Q2 to Q3. Current market pricing for peak size 48 is around $1.40, with an expected blended average price of about $1.30 per pound for Q3.

“So we pushed about 500,000 pounds from Q2 into Q3. And right now we're seeing pricing anywhere. So remember, pricing is a function of how many sizes and the price per size. But the peak size right now is about a 48. And we're seeing about $1.40 for 48. today. So anywhere from $1.30 to $1.40. So I would expect our blended average price to be somewhere on the order of magnitude of $1.30 maybe.”

asked by El Nabor · answered by Harold Edwards

Can you provide an update on the current lemon pricing per carton?

Lemon pricing is currently above $20 per carton across all grades and sizes. A forecast indicates an increase of about $1 per carton each month from July to October, reaching $21 in July and $22 in August.

“Yes, lemons are also another encouraging story right now. We're seeing average pricing across all grades and sizes above $20. And Greg and I just saw a forecast for the remainder of the fiscal year that has the average pricing across all sizes and grades, the average going up about $1. carton each month between now and October. So theoretically, $21 in July, $22 in August, and so on and so forth. So we haven't seen that much strength in lemon pricing since 2018.”

asked by El Nabor · answered by Harold Edwards

What are the conditions for closing the Windfall Farms sale in Q4, and what happens if the buyer fails to close on schedule?

The deal will likely fall out of escrow if the buyer cannot close. The first hard money is due July 1st, and the buyer has until the end of October to complete due diligence, at which point they must fund $10 million. The remaining $6 million will be paid over three years.

“Yes, so if the buyer can't close on schedule, the deal probably falls out of escrow. But we receive our first hard money on July 1st, so just in a matter of weeks here. And then the deal can close at any time after July 1st. We gave the buyer a substantial amount of money. amount of time for him to complete his due diligence, which is he can extend it all the way to the end of October, at which point he'll have to fund $10 million to have a execute the transaction, and then we'll owe us $2 million annually for the next three years to complete the $16 million purchase for 80% of the farm.”

asked by El Nabor · answered by Harold Edwards

What factors contributed to the improved lemon pricing year-over-year, especially considering the Sunkist marketing fee?

The improvement is attributed to a strengthening market, Sunkist's strong market presence with retail and food service contracts, and high fresh utilization rates, which are currently above 80% since returning to Sunkist.

“That's a great question because it's a little bit of all of the above. I would say the market is strengthening, but I would attribute the majority of the increase to the very, very strong market presence that Sunkist provides with with contract relationships with retail buyers and very strong contracts with food service buyers. and the last thing just to mention is that our fresh utilization since returning to Sunkist is the highest we've seen in years. above 80% so far. So I know we still have half the year to go, but we're off to a great start in our relationship with Sunkist.”

asked by Unknown Speaker · answered by Harold Edwards

What milestones should investors watch for regarding the Colorado River water rights monetization in FY26, and what is the most likely structure?

An outright sale is less likely than a crop substitution that frees up water for long-term lease or sale of access rights. Investors should watch for developments related to contracts along the Colorado River expiring on December 31, 2026, which is putting pressure on the Bureau of Land Management to act.

“Outright sale is probably less likely than some sort of crop substitution that frees up water that's allocated to our land and make it available to lease long term or sell the access to the rights directly. I think as far as what needs to happen to get that done, we're keeping an eye closely on some contracts along the Colorado River with the reservoirs that are set to expire December 31 of 2026. So the pressure's on BLM, or Bureau of Land Management reclamation to get things moving in the right direction. At the very least, there would be an extension of the current following agreements, but we think there's more opportunity that we get a long-term program in place and we can monetize ourselves.”

asked by Unknown Speaker · answered by Greg Hamm