California-based avocado company Calavo Growers has announced a sharp fall in sales in the second quarter ended 30 April 2005 because of the timing of harvesting by its growers.
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Calavo posted revenues of $60.2m compared with $76.4m in the year-earlier second quarter, owing to sharply lower sales in its California avocado business segment due, in part, to the timing of the domestic harvest by Calavo’s growers.
Earlier, Calavo had issued guidance that its California growers moderate their harvesting as a result of the over-supply of avocados in the marketplace by competing packers that served to adversely impact pricing. A cyclically smaller current-year domestic crop, persistent heavy rains in California, the initial uncertainty over the effect and impact of the year-round introduction of Mexican avocados in the US marketplace, and lower per-pound pricing also were factors in the quarterly drop in revenue.
Net income for the fiscal 2005 second quarter totalled $2.5m, which compares with $2.3m in the comparable period one year earlier. Results in the most-recent quarter include a one-time pre-tax gain approximating $1.7m from the sale of the company’s former corporate headquarters in Santa Ana, California.
“Calavo advised its growers to moderate how they pick their fruit, recognizing that too many pounds of avocados were flooding into the market, even as the size of the crop cyclically contracted from last year,” said Lee E. Cole, chairman, president and chief executive officer. “As a result, we now are seeing increased volume into our two California packinghouses and expect to realize strong quarter-to-quarter advances in both pounds and pricing during the third period, as well as increased domestic market share and returns to growers.”
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By GlobalData“Despite challenging industry conditions, it is gratifying that Calavo nonetheless successfully generated more than $2m in quarterly operating profit from its three business units,” Cole said.
The company posted net income of $920,000 on sales of $107.9m for the six months ended April 30, 2005. This compares with profit of $2.0m on sales of $125.5m in last year’s first half.
