Results for the third quarter of 2022 are released by Calavo Growers, Inc (NASDAQ:CVGW).
Calavo Growers
Shares of Calavo Growers (NASDAQ:CVGW) plummeted 14% on Friday as a result of the company’s fiscal third-quarter earnings being below analysts’ expectations. The producer of avocados announced an adj. EPS of $0.16 for the quarter late Thursday, missing forecasts. Total revenue increased by 20% to $342M, with the Grown sector contributing $207.6M (+28% Y/Y) and the Prepared segment contributing $134.9M (+9% Y/Y).
The company reported that the Prepared segment’s earnings were under pressure from a steep rise in the cost of fruit inputs for its guacamole product line, while the Grown segment’s results were affected by difficulties with the availability of avocados and price instability in Mexico.
Due to supply limitations in Mexico and measures taken to protect margins, avocado prices increased by 63% year over year while volume decreased by 19%.
Calavo Growers (CVGW) indicated that the Grown segment’s conditions began to improve in August and that margins are currently moving toward the historical range of $3 to $4 per carton, although the volume is anticipated to remain problematic in the short run.
Selling, general, and administrative costs increased from $12.4M in the prior period to $16.7M as a result of non-recurring consulting services and recruiting fees related to restructuring efforts, an increase in incentive compensation costs of $1.7M, and an increase in incentive compensation expenses.
Calavo Growers (CVGW), looking forward, stated that it had observed the volatility that adversely impacted performance in the third quarter abate in August and expected more typical conditions to persist throughout the remaining weeks of the quarter.
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Author Jowi Kwasu 
