Noting a slight decline in fresh segment revenue, Santa Paula, Calif.-based Calavo Growers on June 8 reported results for the quarter ending April 30.
Fresh segment revenue decreased 5%, due primarily to 9% growth in avocado volume, offset by a 10% decrease in avocado prices and 31% lower tomato revenue, according to a news release. Renaissance Food Group and Foods segments revenues increased 3% and 16% year-over-year, respectively, according to the company.
Calavo reported total revenue of $276.8 million, down slightly from $281.2 million for the second quarter a year ago.
For the quarter ending April 30, Calavo reported gross profit of $22.6 million, or 8.2% of revenue. That compares with $22.1 million, or 7.9% of revenue, for the comparable period last year. The increase in gross profit margin percentage was attributable to volume growth in the fresh segment, according to the release
“We are indeed seeing positive signs as the economy reopens and we are pleased with our recovery, which is driving our long-term optimism,” James Gibson, CEO of Calavo Growers, said in the release. “For the first half of 2021, we recorded the highest avocado volume in the last five years — reflecting growing consumer demand across all our end markets.”
Profitability in the quarter was “restrained,” Gibson said in the release, as Calavo managed through a tight labor market, higher commodity costs and higher freight costs.
Calavo will continue to focus on strategic initiatives designed to enhance the company’s long-term growth prospects, Gibson said in the release. Those include, he said, capitalizing on opportunities to increase operating leverage, furthering Calavo’s sustainability initiatives, and realizing synergies across the entire organization.
“To that end, we have created ‘Project Uno,’ which is a strategic review of the current and future challenges in our business,” Gibson said in the release. “We will be teaming with an outside consultant for this enterprise-wide business and operational review.
Through this project, we are evaluating opportunities to enhance revenue growth, streamline operations, drive efficiencies and make investments that strengthen our competitive position and improve margins over the long term. The project is in its early stages, and we expect to provide additional information and details later in the year.”
