SANTA PAULA, Calif., March 12, 2025 (GLOBE NEWSWIRE) — Calavo Growers, Inc. BB #:113203, a global avocado industry leader and provider of value-added fresh food, today reported its financial results for the fiscal first quarter ended January 31, 2025.
First Quarter Financial Overview
- Total net sales of $154.4 million, a 21.0% increase from the prior year quarter. Fresh[1] segment sales increased $26.8 million, or 23.7%, from the prior year quarter. Prepared segment sales remained essentially flat from the prior year quarter.
- Gross profit of $15.7 million, a 46.2% increase from the prior year quarter. Fresh segment gross profit of $12.1 million, an 88.8% increase from the prior year quarter. Prepared segment gross profit of $3.6 million, a 17.1% decrease from the prior year quarter.
- Selling, general, and administrative (SG&A) expenses of $10.3 million, a decrease of 23.6% from the prior year quarter.
- Net income from continuing operations of $4.4 million, or $0.25 per diluted share, compared to a net loss from continuing operations of $2.6 million, or $(0.15) per diluted share from the prior year quarter.
- Adjusted net income[2] of $5.9 million, or $0.33 per diluted share, compared to adjusted net loss of $1.4 million in the prior year quarter or $(0.08) per share.
- Adjusted EBITDA2 of $9.3 million, compared to adjusted EBITDA of $3.1 million in the prior year quarter.
Adjusted net income (loss)[2], adjusted net income (loss) per diluted share, and adjusted EBITDA2 are non-GAAP financial measures. See “Non-GAAP Financial Measures” below.
[1] As part of our financial reporting under ASC 280, we have updated the name of our ‘Grown’ segment to ‘Fresh’ to better reflect the nature of our operations. This is a name change only and does not impact the composition or financial reporting of the segment.
[2] During the first quarter of fiscal 2025, we modified our calculation of Adjusted Net Income and Adjusted EBITDA to remove income (loss) from unconsolidated entities from excluded items. Management believes this change enhances comparability with industry peers and provides a clearer representation of our core operating performance. Prior-period amounts have been recast for comparability where applicable. This adjustment does not impact previously reported GAAP financial results.
First Quarter Highlights for Continuing Operations
- Fresh segment sales had significant revenue growth, driven by a 30.5% increase in average price per carton, which more than offset a 4.6% decline in volume.
- Prepared segment net sales remained steady as a 7.3% increase in volume was largely offset by lower average selling prices per pound.
- Gross profit benefited from stronger avocado margins primarily due to the combination of higher average selling prices and lower fruit costs.
- SG&A expenses declined significantly as a result of our ongoing focus on cost discipline and lower professional expenses.
- We continue to cooperate fully with the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) investigations relating to the Foreign Corrupt Practices Act (FCPA). On February 18, 2025, the SEC notified us that activity in the investigation has been postponed after President Trump issued Executive Orders on February 10 and February 18, 2025. Given the Attorney General’s February 5, 2025 Memo and the President’s Executive Orders, indicating a shift in DOJ and SEC priorities, we do not currently anticipate any near-term action from the government’s FCPA inquiry that would likely have a material impact on our short-term financial outlook.
- The Board of Directors declared a quarterly cash dividend of $0.20 per share to be paid on April 29, 2025, to shareholders of record on April 1, 2025.
- After quarter end, we achieved a significant milestone in our tax strategy, as the Mexican tax authorities (SAT) refunded 13.7 million Mexican pesos in VAT (approximately $0.7 million USD), including inflationary adjustments, for March 2019. We believe this favorable resolution—secured directly from the tax authority rather than through the court system—reinforces the strength of our approach and provides positive momentum as we continue working to recover additional outstanding refunds.
Management Commentary
“Our first quarter results reflect the strongest Q1 adjusted net income performance we’ve delivered since 2019,” said Lee Cole, President and Chief Executive Officer of Calavo Growers, Inc. “Our strategic focus on margin improvement and operational efficiency is driving tangible results, with Fresh segment sales increasing about 24% and overall net sales up about 21% year-over-year.
“The pricing strength in our avocado business, combined with disciplined cost management, contributed to a more than 200% increase in Adjusted EBITDA and a return to meaningful profitability. We also made significant progress in reducing SG&A expenses, reinforcing our commitment to operational discipline and long-term value creation.
“We also continue to monitor regulatory developments, including changes in FCPA enforcement priorities under the current administration. While it’s too early to assess the full impact, we remain committed to maintaining strong compliance standards while focusing on our long-term growth strategy.
“Our primary goal is to ensure we continue serving our customers efficiently and effectively. Although tariffs on imports from Mexico introduce additional costs, we do not currently expect them to have a meaningful impact on our operations. We believe avocados, tomatoes, and guacamole will remain a compelling value for consumers given their nutritional content and versatility, and we expect strong demand to continue.
“Looking ahead, we are confident in our ability to sustain the momentum we’ve created as we enter the peak California avocado season. With a strong start to the year, we remain focused on executing our growth strategy, enhancing margins, and delivering continued value to our shareholders.”
First Quarter 2025 Consolidated Financial Review for Continuing Operations
Total net sales for the first quarter of 2025 were $154.4 million, compared to $127.6 million for the first quarter of 2024, representing a 21.0% increase. Fresh segment sales increased $26.8 million, or 23.7%, driven primarily by a 30.5% increase in average price per carton, partially offset by a 4.6% decline in volume. Prepared segment sales remained essentially flat compared to the prior year.
Gross profit for the first quarter was $15.7 million, or 10.2% of net sales, compared to $10.8 million and 8.4% of net sales, in the same period last year. Fresh segment gross profit increased 88.8% to $12.1 million, benefiting from higher avocado pricing, improved margins and stronger performance in tomatoes. Prepared segment gross profit declined 17.1% to $3.6 million, primarily due to higher fruit costs.
SG&A expenses for the first quarter totaled $10.3 million, or 6.7% of net sales, compared to $13.5 million, or 10.6% of net sales in Q1 2024, representing a $3.2 million, or 23.6% reduction. The decrease primarily reflects lower compensation expenses due to lower headcount, as well as lower professional fees related to the previously disclosed investigation.
Net income for the first quarter was $4.4 million, or $0.25 per diluted share, compared to a net loss of $2.6 million, or $(0.15) per diluted share, in Q1 2024.
Adjusted net income was $5.9 million, or $0.33 per diluted share, compared to an adjusted net loss of $1.4 million, or $(0.08) per share, in the prior year quarter, marking the company’s strongest first-quarter performance since 2019.
Adjusted EBITDA nearly tripled, increasing over 200% to $9.3 million, compared to $3.1 million in Q1 2024, driven by higher margins in the Fresh segment and operational efficiencies.
Segment Performance
Fresh
Fresh segment gross profit was $12.1 million, an increase of $5.7 million compared to the prior-year quarter. Avocado gross profit improved to $11.3 million, up $5.1 million year-over-year. Avocado volume declined by 4.6%, but avocado prices were approximately 30.5% higher than in the prior-year quarter. In our tomato business, gross profit increased by approximately $0.8 million to $1.0 million, primarily driven by pricing improvements and a 7.7% increase in volume.
Prepared (continuing operations)
Prepared segment gross profit declined $0.7 million compared to the prior year quarter. Gross margin decreased primarily reflecting the impact of higher fruit input costs.
About Calavo Growers, Inc.
Calavo Growers, Inc. (Nasdaq: CVGW) is a global leader in the processing and distribution of avocados, tomatoes, papayas and guacamole. Calavo products are sold under the trusted Calavo brand name, proprietary sub-brands, private label and store brands. Founded in 1924, Calavo has a rich culture of innovation, sustainable practices and market growth. The company serves retail grocery, foodservice, club stores, mass merchandisers, food distributors and wholesalers worldwide. Calavo is headquartered in Santa Paula, California, with facilities throughout the U.S. and Mexico. Learn more about The Family of Fresh at calavo.com.
Investor Contact
Julie Kegley, Senior Vice President
Financial Profiles, Inc.
calavo@finprofiles.com
310-622-8246
