Calavo Growers: Avocado Boom Drives Strong Fiscal 2024 Results

Calavo Growers, Inc. (Nasdaq: CVGW) reported robust financial results for the fiscal year ended October 31, 2024, driven by the continued growth of the global avocado market. The company's focus on its core avocado and guacamole operations, following the divestment of its Fresh Cut business, has positioned it well for sustained success.



Key Financial Highlights

* Total net sales increased 11.4% to $661.5 million, with the Grown segment up 13.3% to $597.6 million, while the Prepared segment decreased 4.2% to $63.9 million.
* Grown segment net sales increased 13.3% to $597.6 million, driven by a 25% increase in avocado prices and a 10% volume growth in the fourth quarter.
* Net income from continuing operations improved to $6.8 million, or $0.38 per share, up from $5.1 million in the previous year.
* Adjusted net income increased to $18.7 million, or $1.05 per share, compared to $11.5 million, or $0.64 per share, in the prior year.
* Adjusted EBITDA increased to $37.0 million, compared to $33.2 million for the prior year.



Strategic Divestment and Operational Optimization

The strategic divestment of the Fresh Cut business in August 2024 has allowed Calavo Growers to sharpen its focus on core avocado and guacamole operations, leading to several positive outcomes:

1. Enhanced core operations and streamlined corporate structure: By divesting the Fresh Cut business, Calavo has been able to enhance its core operations and streamline its corporate structure, resulting in meaningful reductions in SG&A expenses.
2. Strengthened balance sheet: The sale of the Fresh Cut business has reduced debt and generated a strong cash position, which has helped the company reward investors with a higher dividend that it plans to maintain in 2025.
3. Improved operational efficiency: The divestment has allowed Calavo to focus on its core competencies, leading to improved operational efficiency and better utilization of resources.
4. Strategic focus on avocado and guacamole: With the divestment of the Fresh Cut business, Calavo can now concentrate on growing its avocado and guacamole businesses, which are key drivers of revenue and profitability. This focus will enable the company to leverage organic growth opportunities and maintain its competitive edge in the market.

Looking Ahead to Fiscal 2025

Calavo Growers' management expects double-digit growth in avocado and guacamole sales volumes for fiscal 2025, focusing on operational optimization and organic growth opportunities. The company's strategic focus on core avocado and guacamole operations, coupled with its enhanced supply chain capabilities and global sourcing strategies, positions it well for strong market performance, particularly during high-consumption periods like the Super Bowl.

In conclusion, Calavo Growers' fiscal 2024 results demonstrate a solid performance with total net sales increasing 11.4% to $661.5 million. The Grown segment, primarily avocados, showed robust growth of 13.3%, while the Prepared segment saw a slight decline. Net income from continuing operations improved to $6.8 million, or $0.38 per share, up from $5.1 million in the previous year. The strategic divestment of the Fresh Cut business and focus on core avocado and guacamole operations position Calavo for stronger market performance. The company's enhanced supply chain capabilities and global sourcing strategies provide competitive advantages in meeting growing avocado demand, particularly during high-consumption periods like the Super Bowl.