Calavo Growers Reports 12% Revenue Growth, Net Loss in Q3 2024 Amid Strategic Shifts

Calavo Growers, Inc. reported its financial results for the third quarter and nine months ended July 31, 2024, highlighting significant changes in revenue, profitability, and strategic developments. For the three months ended July 31, 2024, net sales increased by 12% to $179.6 million, compared to $160.9 million in the same period of 2023. The Grown segment contributed $163.2 million, up from $144.1 million, driven primarily by a 20% increase in avocado sales prices, despite a decrease in volume sold. However, gross profit for the quarter decreased by 9% to $20.1 million, resulting in a gross profit margin decline to 11.2% from 13.7% in the prior year.

For the nine months ended July 31, 2024, net sales rose 9% to $491.6 million, with the Grown segment also showing a 10% increase. Gross profit for this period increased by 7% to $51.5 million, although the gross profit margin slightly decreased to 10.5% from 10.7% in the previous year. The company reported a net loss of $0.8 million for the third quarter, a significant decline from a net income of $6.7 million in the same period last year, primarily due to a net loss from discontinued operations of $6.1 million, which included a goodwill impairment charge of $9.3 million related to the Fresh Cut business.

Calavo's strategic decision to divest its Fresh Cut business was finalized on August 15, 2024, for $83 million, which is expected to enhance liquidity and allow for investments in core operations. The company also amended its credit agreement, reducing revolving commitments from $90 million to $75 million. As of July 31, 2024, total current assets surged to $238.3 million, up from $133.4 million, largely due to the classification of assets held for sale related to the Fresh Cut business.

Operating income for the three months ended July 31, 2024, was $9.4 million, down from $10.2 million in the prior year. The company reported a net income from continuing operations of $5.4 million for the quarter, compared to $8.7 million in 2023. For the nine-month period, net income from continuing operations was $9.3 million, a slight decrease from $9.7 million in the previous year. The company’s cash and cash equivalents decreased to $1.1 million from $2.1 million as of October 31, 2023, reflecting ongoing operational challenges and strategic shifts.

Overall, Calavo Growers is navigating a complex landscape marked by both growth in certain product lines and significant restructuring efforts, particularly with the divestiture of its Fresh Cut business.