Calavo Growers and Mission Produce offer window to avocado world with quarterly reports

If you can’t stop obsessing about avocados, it is likely your field of vision will fall on the people who sell the fruit.

No one is more visible than Calavo Growers (CVGW)  and Mission Produce(AVO), now both publicly traded companies. Each reported quarterly financial results on March 10.

For avocado and industry junkies, the lockstep timing for the quarterly results ending Jan. 31 makes it easy to compare the highlights. Here are a few strands pulled from their respective news releases.

In terms of total revenue, Calavo reported total revenue for the quarter ending Jan. 31 of $220.6 million, a 19% decrease year over year, reflecting 2% growth in avocado volume offset by lower avocado prices and lower revenue in the Renaissance Food Group (“RFG”) and Foods segments.

Mission Produce  reported  total revenue of $173.2 million for the quarter ending Jan. 31,  a 12% decrease compared to the same period last year. Mission said its avocado volume sold increased 7%, while the average selling price decreased 18% compared to the same period last year.

In terms of gross profit,  Calavo Growers reported first quarter gross profit of $17.8 million, or 8.1% of revenue. That compares with  $15.8 million, or 5.8% of revenue, for the same quarter a year ago.

Gross profit for Mission Produce increased 17% to $22.7 million, and gross profit margin increased 328 basis points, to 13% of revenue.

Outlook

As far as outlook for the second  quarter of fiscal year 2021, Mission Produce said it was not providing formal guidance because due to the  “fluidity” of the market at this point in the year. Mission said consolidated volume for the second quarter-to-date period through February 2021 is trending up approximately 14% versus prior year.

Sales prices for the second quarter-to-date period through February 2021 are trending down approximately 20% versus prior year.

“For the second quarter-to-date period, pricing continues to be down versus the prior year, but we are beginning to see some increase, which if sustainable would create a positive environment for our International Farming segment in the back half of this fiscal year,” Steve Barnard, CEO of Mission Produce, said in the release. “Consumption patterns at retail have remained resilient, increasing 16% in January, despite the disruption to large gatherings and uncertainty surrounding major events such as the Big Game. We believe this is evidence that the avocado is officially a staple in consumer diets today and should continue to support long-term consumption growth.”

Meanwhile, Calavo Growers set revenue expectations for the second fiscal quarter of 2021 at  in a range of $255 million to $275 million.

“We are optimistic about the remainder of 2021, particularly the second half,” said James E. Gibson, CEO of Calavo Growers in the release.  “While the pandemic is still having a substantial impact on many of our foodservice customers, we believe that they will be able to bridge from this challenging environment to what we anticipate will be a strong economic rebound once we as a country achieve widespread vaccination and herd immunity. In the meantime, we are moving ahead with the implementation of our strategic initiatives designed to enhance our long-term growth prospects, capitalizing on opportunities to increase operating leverage, further our sustainability initiatives, and realize synergies across our entire organization, with the goal of improving profitability, sustainability, and shareholder value.”

Mission Produce (AVO), with an estimated market cap of $1.5 billion (Schwab), closed trading on March 15 at $21 per share. That is up about $5.95 per share, or 40%, since the beginning of the year.

Calavo Growers (CVGW), with an estimated market cap of $1.4 billion (Schwab)  closed trading on March 15 at $81.18 per share. That is up about $11.75 per share,  or 17%,  since the beginning of the year.

Avocados are the main thing at both companies(a good fruit to be the “main thing,” I think), obviously, but  it seems to make sense that both will continue to diversify to limit the swings in results caused by roller coaster avocado shipping point prices.

Pardon us junkies; we just can’t stop staring at these marketing giants who are helping to write the story of the continued rise of avocados.