Fueled by a nearly 20% gain in avocado volumes sold, Santa Paula, Calif.-based Calavo Growers Inc. reports a big rise in operating income and gross profit in the most recent quarter.
Calavo reported Sept. 5 that for the three months ending July 31, operating income rose 58% compared with the same quarter a year ago, while gross profit jumped 33% from year-ago levels.
“Calavo posted another strong showing in the fiscal third quarter,” chairman, president and chief executive officer Lee Cole said in a news release. “In our Fresh segment, we executed well, increasing our volume of avocado units sold by 18% from last year’s third period.”
While consumption tracked higher, he said the larger available fruit supply industry-wide resulted in lower year-over-year fresh avocado market pricing. That held back Calavo’s sales growth in the quarter, he said.
The company said double-digit unit sales growth in all fresh product categories — namely avocados and tomatoes — resulted in 20% increase in total volume to 4.9 million units in the most recent quarter, up from 4.1 million units the same quarter a year ago.
The company reported revenues in the most recent quarter of $296.4 million, down 2% from the company’s all-time quarterly record high of $301.6 million in the fiscal 2017 third period.
Gross profit for the quarter ending July 31 rose 33% to $33.1 million, equal to 11.2% of revenues. That compares with gross profit of $24.9 million — 8.2% of revenues — for the same period a year ago.
The company said its Renaissance Food Group business segment, marketing refrigerated-fresh product offerings, delivered 8% higher sales and increased gross profits by 46% in the third period. RFG segment sales and gross profit would have been higher if not for a widely publicized melon recall, according to the company.
Calavo Foods business segment, marketing prepared avocado products, showed revenue growth of 25% in the most recent quarter.
Cole said Calavo’s outlook remains strong in the months ahead.
“The industry continues to forecast avocado volume growth of more than 20% for 2018, and a strong, all-source supply in fiscal 2019,” he said in the release. “With our diversified sourcing model and ample packing capacity in California and Mexico, we are poised to once again deliver strong volume growth in fiscal 2019.”