Coral Gables, Fla.-based Fresh Del Monte Produce Inc. reported that net sales for the quarter ended July 2 increased 5% to $1.14 billion.
Gross profit was $110 million for the quarter, which represents an increase of 40% compared with the same period last year, according to a news release. The company reported its gross profit margin increased from 7.2% in the prior-year period to 9.6% in the second quarter of 2021.
“Our strong performance during the second quarter of 2021 reflects relaxed restrictions on social gatherings in some of our key markets, compared to the prior-year period,” Mohammad Abu-Ghazaleh, chairman and CEO, said in the release. “Our pineapple, fresh-cut fruit and prepared food products led sales and profitability growth, despite inflationary and cost pressures, which are expected to continue.”
Net sales for the second quarter of 2021 increased $49.3 million, or 5%, compared with the prior-year period, according to the release.
The increase in net sales was primarily driven by higher net sales in the company’s fresh and value-added products and other products and services business segments, according to the release.
Gross profit for the increased $31.3 million, or 40%, and adjusted gross profit increased $22.7 million, or 25%, compared with the prior-year period.
The overall increase in gross profit was partially offset by higher per unit fuel, labor, inland freight, packaging, production and procurement costs which were negatively impacted by inflationary market pressures and other unfavorable economic conditions, including lack of sufficient labor availability, in the second quarter of 2021, according to the release.
Fresh and value-added product net sales for the second quarter of 2021 increased $37.8 million, or 6%, compared with the prior-year period, according to the release. The increase was mainly due to higher net sales of pineapples, fresh-cut fruits and fresh-cut vegetables as a result of less restrictions on social gatherings in certain key markets which had a positive impact on demand when compared to the prior-year period, according to the release.
However, partially offsetting the increase were decreases in net sales of non-tropical fruit and avocados.
The primary drivers of the variance in net sales, according to the release, were:
- Higher net sales in the pineapple product line in all regions, driven by an increase in per unit sales prices and sales volumes;
- Higher net sales in its fresh-cut fruit product line, primarily in Europe and North America, driven by an increase in sales volumes and per unit sales prices;
- Higher net sales in the fresh-cut vegetable product line, primarily in the Middle East and in its Mann Packing business in North America, driven by an increase in sales volumes and per unit sales prices;
- Lower net sales in the non-tropical fruit product line, primarily in the Middle East, and to a lesser extent, North America and Asia. Severe rainstorms in Chile at the beginning of 2021 negatively impacted the Company’s non-tropical fruit crops;
- Lower net sales in its avocado product line, principally due to lower sales volumes and per unit sales prices, primarily as a result of excess supply in the market.
Banana net sales for the second quarter of 2021 decreased $2.9 million, or 1%, compared with the prior-year period, principally due to lower net sales in the Middle East, and to a lesser extent in North America, partially offset by higher net sales in Europe and Asia, according to the release.
Gross profit for the second quarter of 2021 increased $7.7 million, or 20%, compared with the prior-year period. That, according to the release, was primarily driven by North America and Europe.
Higher banana per unit sales prices in North America were partially offset by higher fuel, labor, inland freight, packaging, production and procurement costs.
Adjusted Gross profit in the banana business segment for the second quarter of 2021 increased $6.5 million, or 16%, compared with the prior-year period.
