Calavo Growers Announces Second Quarter Results for 2018
SANTA PAULA, CA - Calavo Growers’ business is seeing nothin’ but net these days. Beyond the basketball metaphor, the global avocado provider reported net income and earnings per share for its fiscal 2018 second quarter and initial six months—from the looks of it, the company is quick on its feet and alive on the court.
“Calavo completed a solidly profitable second quarter, making notable advancements across our three principal business segments. This progress included strong avocado volume growth in our Fresh segment and higher revenues, gross profit and gross profit margins in both our Renaissance Food Group (RFG) and Calavo Foods segments,” Chairman, President and Chief Executive Officer Lee E. Cole. “The Fresh business experienced double-digit growth in avocado unit volume. Avocado market pricing remained near historic norms in the most-recent quarter versus last year, when the industry experienced a rapid increase toward historically high market pricing in the second quarter of 2017. Despite this year’s higher volume, the combined result was lower year-over-year avocado sales. Calavo’s Fresh segment gross profit remained strong in the second quarter, above historic norms, albeit lower than last year when the industry experienced extraordinary market dynamics in which consumer demand dramatically exceeded available supply.”
In the results, the company reported a net income totaling $14.1 million, which equals out to $0.80 per diluted share—a nine percent increase from last year’s second quarter, $12.9 million or $0.74 per diluted share.
Additional second quarter highlights included:
- Diluted EPS Rises to 80 Cents from 74 cents in fiscal 2017, second Period
- Double-digit volume increase in fresh avocado units sold
- Renaissance Food Group gross profit advances 36% year-over-year
- Calavo Foods segment revenues and gross profit climb 30-plus%
Net income for the six months ending on April 30, 2018, jumped 17% to $21.3 million, or $1.21 per diluted share. This is a big spike from last year’s first half, which reported $18.2 million or $1.04 per diluted share.
According to a press release, the number of fresh units sold in the most recent quarter comes out to 4.7 million, not too far off the 4.8 million during the year prior.&
In the RFG business segment, sales rose 7% to $104.6 million from $97.7 million in the same quarter last year. Gross profit climbed more than 35 percent to $9.3 million, or 8.9 percent of segment sales, from $6.9 million, or 7.0 percent of segment sales in last year’s corresponding quarter. Delays in certain new programs and an industry-wide food safety concern over romaine lettuce constrained RFG’s revenue growth this past quarter. However, manufacturing efficiencies across the segment’s production footprint, as well as favorable raw material costs, drove the considerable increase in year-over-year gross profit.
Moving forward, the company has high hopes for the rest of this year and beyond.
The team noted looking forward in fiscal 2018:
- Approximately 20% growth in avocado-industry volumes
- Double-digit revenue and gross profit growth for RFG
- Double-digit revenue and gross profit growth in Calavo Foods
Cole expressed hopes for continued growth and record-making revenues to create a double-digit increase in earnings per share for the full year.
“Overall fresh avocado demand and consumption continues to trend upward, and the larger all-source supply for this year–as much as 20 percent above last year–bodes well for our company as a category leader. During the second half of the year, we expect to source from multiple geographic regions, including California, Mexico, Peru and Colombia, and anticipate continued year-over-year, double-digit volume increases in avocado units sold. While unit volumes are expected to remain strong, last year’s second half was marked by unprecedented avocado market dynamics which may skew year-over-year avocado comparisons throughout the remainder of the year,” Cole shared, adding that the team is on a path to register high-teen revenue growth and gross profit margin, in line with historic levels during this year’s third and fourth quarters.
To read the full report, click here.
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