Fresh Del Monte Produce reports strong quarterly results but extreme cost pressures
Coral Gables, Fla.-based Fresh Del Monte Produce Inc. has reported its fifth straight quarter of net sales growth.
“We delivered strong net sales during the second quarter, marking the fifth consecutive quarter of net sales growth compared with the prior-year periods — demonstrating the resilience of our iconic brand. Our net sales increased by $70 million, resulting from necessary pricing actions — generating growth across most product categories," Mohammad Abu-Ghazaleh, chairman and CEO, said in a news release.
Fresh Del Monte Produce continues to operate in one of the "most volatile and uncertain macroeconomic environments" in recent years, he said in the release.
"As a result, the cost of product sold increased by $100 million, driven by broad-based inflationary, supply chain, and logistical headwinds,” Abu-Ghazaleh said in the release. "Despite these headwinds, we generated positive earnings — all while maintaining our debt balance in line with last year, generating strong cash flow from operations and continuing our dividend payout."
Fresh Del Monte will focus on sustainable growth strategy and delivering against its key elements of organic expansion, product innovation, investments in technology, best-in-class customer relationships and sustainability, he said in the release.
Net sales for the second quarter of 2022, ending July 1, increased $70.3 million, or 6%, compared with the prior-year period, according to the release. Net sales benefited from inflation-justified price increases, which were partially offset by the negative impact of fluctuations in exchange rates, primarily versus the Japanese yen and euro compared with the prior-year period.
Gross profit for the second quarter was $80.7 million compared with $110 million in the prior-year period, the release said.
Despite higher net sales, gross profit continued to be hurt by wide-ranging cost pressures, according to the release. Higher costs were noted for packaging materials, fertilizers, ocean and inland freight, fuel and labor, according to the release.
