Calavo Growers lowers expected earnings for third-quarter 2021
Santa Paula, Calif.-based Calavo Growers, Inc. a global avocado-industry leader and provider of value-added fresh food, has announced that after an initial review of its third quarter 2021 operating results, the Company now expects revenue to be between $275 million and $285 million, near the low end of its previously announced range, while adjusted EBITDA (a non-GAAP financial measure) is expected to be in the range of $0 to $2 million, below its previously announced range of $11 million to $15 million.
Calavo’s third quarter 2021 results will be reported on September 8, 2021, and the Company will hold its earnings call the same day.
The revised adjusted EBITDA estimated range is largely due to gross margins that are below the Company’s previous expectations.
The Company’s original forecast reflected near-term inflationary pressures on labor, raw materials and freight, as previously discussed. However, these pressures as well as delays in the Mexican and Californian avocado crops were more acute than anticipated.
The delay in the Mexican summer crop and slow start to the California season resulted in limited supplies of the most desirable fruit (both in sizes and quality) which affected the Company’s avocado margins. In the Company’s Renaissance Food Group, labor shortages impacted throughput and increased the cost of labor. Raw material costs and freight costs remained higher and for longer than expected, impacting all segments.
The Company expects that a number of these pressures will continue into the fourth quarter, but that by the end of the calendar year many of them will be mitigated through a combination of pricing initiatives and the implementation of internal operational efficiencies.
