Santa Paula, Calif.-based Calavo Growers reported that its total net sales increased 11.7% to $179.6 million for the fiscal quarter ending July 31. The company reported strong avocado margins despite temporary supply disruptions from Mexico, according to a news release.
“Our third quarter results reflect continued momentum in our flagship avocado business,” Lee Cole, president and CEO of Calavo Growers, said in the release. “Despite temporary industry supply disruptions from Mexico during the quarter, we generated strong financial results due to our operational flexibility and our resilient team. Although our guacamole business experienced headwinds from higher fruit input costs compared to the third quarter last year, our volume increased 7% due to our focus on growing the business. I am also pleased to share that we will be launching some exciting, innovative guacamole products during the fourth quarter.”
For the quarter ending July 31, avocado prices increased by 25% compared to the third quarter last year while avocado margins improved, which helped to offset an avocado volume decline of 4.5%, the release said. The volume decline was partly attributed to the impact of supply disruptions from Mexico during the quarter, which the company said have since been resolved.
For its prepared segment, the company said it expects margins in the guacamole business to improve in the fiscal fourth quarter as input costs recede. In addition, the company plans to launch some innovative new guacamole products during the fiscal fourth quarter that the company expects will support growth in fiscal 2025.
Calavo’s momentum has carried into the fourth quarter, Cole said.
The company divested its fresh-cut business on Aug. 15 this year.
“We intend to deploy the cash that we generated from the sale of our fresh cut business by investing in our core avocado and guacamole businesses and by returning cash to shareholders over time,” Cole said. “Given the renewed focus on our core operations, improvements in our financial performance, and our confidence in our operational execution going forward, I am pleased to share that we have doubled the quarterly dividend to $0.20 per share.”
