What factors influenced LVRO's earnings in 2024?

Lavoro's 2024 earnings were influenced by several key factors:

1. Revenue Growth: Lavoro's revenue increased by 5% year-over-year to $1.89 billion in FY2024, driven by market share gains and sales volume growth, which mitigated deflationary input price headwinds. This growth was also seen in the fiscal third quarter, with a 6% increase in revenue to $514.2 million.
2. Gross Profit Decrease: Gross profit decreased by 19% to $268.4 million in FY2024, with gross margins compressing by -430 basis points to 14.2%. This trend was also evident in the fiscal third quarter, where gross profit decreased by 16% to $60.2 million, and gross margins narrowed by -310 basis points to 11.7%.
3. Crop Care Segment Performance: The Crop Care segment remained a strong performer, with revenue rising by 24% to $150.7 million and gross profit increasing by 4% to $56.1 million for FY2024. This segment's growth was fueled by robust growth in biological products.
4. Deflationary Pressures: Ongoing deflation in input prices throughout Brazil and Colombia affected Lavoro's gross profit and margins. This pressure was partially mitigated by the growth in the Crop Care segment.
5. Market Share Gains and Volume Growth: Market share gains and volume growth in key regions, such as Brazil, contributed to the revenue increase, despite the challenges posed by deflationary pressures.
6. General and Administrative Costs: The largest operating expense for Lavoro was General & Administrative costs, amounting to 65% of total expenses. These costs, along with increased finance costs and income taxes, contributed to the net loss for FY2024.
7. Challenging Market Conditions: Lavoro faced more challenging market conditions than anticipated, which influenced its FY2024 guidance and financial results. The company's earnings call highlighted the challenges facing the company in maintaining revenue momentum and the impact of market headwinds.

In conclusion, while Lavoro experienced revenue growth driven by market share gains and volume expansion, this was tempered by deflationary pressures, cost management issues, and challenging market conditions. The performance of the Crop Care segment as a standout was crucial in mitigating some of these challenges.