On September 9, Limoneira Company (NASDAQ:LMNR) reported a third quarter that looked messy on the surface and much cleaner underneath. Total net revenue fell to $43.8 million from $47.5 million a year earlier, but that drop was mostly the company handing its citrus brokerage business over to Sunkist, not a sign the core business is struggling. Strip that out and lemon pricing actually jumped, avocado volume beat expectations, and adjusted EBITDA climbed to $3.9 million from $3 million. The real story at Limoneira right now isn’t fruit at all. It’s the roughly $200 million in land, water rights, and real estate the company is working to turn into cash.
Cheaper To Run, Richer In Land
Even with an oversupply of Argentine lemons pressuring the market, Limoneira sold fresh lemon cartons at an average of $19.88 apiece, up from $17.02 a year ago, pushing fresh lemon carton sales to $27.3 million from $23.8 million. Avocados told a similar growth story on volume. The company sold 7 million pounds in the quarter, up from 5.7 million, and now expects full-year volume of 7 million to 7.25 million pounds, well above its old guidance of 5.5 million to 6.5 million pounds. Management is pointing to fiscal 2027 as the real inflection point, with avocado output projected to grow roughly 30% as 400 acres planted in 2023 and 2024 start bearing fruit, and another 400 acres still to come online over the next two to four years.
Meanwhile, the company is cutting costs and shedding assets. Selling, general and administrative expenses fell to $4 million from $5 million as Limoneira works toward $10 million in annual savings. It also has a $15 million sale of Windfall Farms set to close on September 14, and will keep collecting $200,000 a year to farm the property for the new owner. Add in a planned $180 million in proceeds from the Harvest at Limoneira real estate project and related developments over the next seven fiscal years, plus a 295,000-ton composting joint venture with Agromin expected to start generating earnings in the second half of fiscal 2027, and the growth case here has almost nothing to do with how many lemons the company ships.
Lemons Still Weigh On The Numbers
The import glut from Argentina is a real problem, not a one-quarter blip. Limoneira sold 1,373,000 cartons of lemons in the quarter, down slightly from 1,397,000, and management now expects to land at the low end of its full-year guidance of 4.0 million to 4.5 million cartons because of how much foreign fruit is sitting in the US market. Avocados brought their own tradeoff. While volume rose, average pricing fell to $1.15 per pound from $1.50, and that combination left avocado revenue at $8 million, down from $8.5 million.
The balance sheet shows some strain, too. Long-term debt climbed to $100.7 million from $72.5 million, even as cash rose only to $2.2 million from $1.5 million. On a GAAP basis, the company posted a wider net loss of $0.17 per diluted share, compared with a $0.06 loss a year earlier, driven in part by an impairment tied to Windfall Farms. And the asset sale strategy still depends on execution across years, not quarters. CEO Harold Edwards acknowledged the lemon supply problem directly, saying Sunkist sales plans fell short because there were simply too many lemons on the market, and separately flagged that heavy rain from an event like El Niño could turn from helpful to damaging if it leads to flooding.
Wall Street Isn’t Rushing In
Hedge fund ownership of Limoneira slipped to 10 funds from 12 the prior quarter, a modest pullback rather than an exodus. Short interest sits at 5.43% of float, a level that suggests a real but not overwhelming bear camp has formed around the stock. The forward P/E of 14.03, as of September 11, isn’t demanding much growth to be baked in already, which leaves room for the story to move either way as the asset sales play out.
A Company Betting On Assets, Not Fruit
Limoneira’s near-term numbers are still tied to lemon and avocado pricing that management can’t fully control, and the widening GAAP loss and rising debt are real. But the company’s own pitch is that its future value sits in land, water rights, and real estate rather than in the produce aisle. For the optimistic case to play out, the Windfall Farms sale, the Harvest at Limoneira project, and the Agromin venture all need to deliver on schedule.
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