Poor weather and higher avocado costs have hit quarterly profits at US fresh produce firm Calavo Growers.
The company reported second-quarter net income of US$2.4m for the three months to the end of April, down on the $4.8m filed a year earlier.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The fall in quarterly profits pushed down Calavo’s half-year earnings, which reached $4.7m – compared to $7.1m for the first six months of the previous financial year.
Chairman, president and CEO Lee Cole said: “Our second-quarter results … reflect fluctuations inherent to our fresh and Calavo Foods segments: adverse weather and cyclically higher fruit costs which resulted in a drag on margins in our prepared avocado business. The impact of these two factors, as well as the lower volume of fresh avocados, account primarily for the difference in our second-quarter operating performance year over year.”
Cole also revealed that lower market volumes of avocados meant there was an “over-reliance” on fruit from Mexico, which was driving up prices. The higher prices had boosted Calavo’s avocado sales but had also hit margins on its guacamole products, he said on Monday (6 June).
Calavo’s second-quarter revenue improved thanks to higher avocado sales. Revenue climbed to $118.7m from $109.2m a year earlier. For the first half of the year, sales were up 19% at $210m.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataAvocado prices would continue to boost Calavo’s avocado sales but hit margins on its guacamole products in the third and fourth quarters of its financial year, Cole said. However, he did forecast prices to “moderate” in the fourth quarter.
