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- **Fresh & Value-Added Growth**: Q3 adjusted gross margin of 13.9% in fresh segment, targeting 13%+ post-Mann divestiture. Pineapple supply constraints support pricing.
- **Banana Margin Challenges**: FY25 banana segment margin expected at 4%, driven by disease-related costs and supply shortages.
- **Strategic Moves**: $56M impairment charges for Mann Packing and underperforming banana farms; new fresh guacamole product line launched.
- **Long-Term Innovation**: Brazilian pineapple expansion (FY28+) and TR4-resistant banana varieties in development.

**【Management Opening Remarks】**
- CEO Mohammad Abu-Ghazaleh highlighted steady progress in Q3 2025, driven by gross margin expansion in fresh and value-added products. The pineapple program performed well, supporting the shift to higher-margin categories.
- The company announced the divestiture of Mann Packing, a non-core business, to streamline operations and improve capital efficiency. This move is expected to close in Q4 2025.
- Abu-Ghazaleh emphasized industry-wide challenges in banana production due to Tropical Race 4 (TR4) and Black Sigatoka, with Costa Rica experiencing a 22% YoY production decline. The company is investing in TR4-resistant varieties but notes long-term solutions are needed.

**【CFO Financial Commentary】**
- **Q3 Financials**: Net sales of $1.022 billion, with adjusted net sales of $960 million. Adjusted gross margin improved to 9.2%, driven by higher-margin fresh and value-added products.
- **Impairment Charges**: $56 million in charges, including $18 million for Mann Packing and $37 million from underperforming banana farms in the Philippines.
- **Segment Performance**:
  - **Fresh & Value-Added**: Adjusted gross margin of 13.9%, up from 11.2%, due to pineapple strength and tariff-related price adjustments.
  - **Banana Segment**: Gross margin compressed to 1.2% due to higher production costs and disease-related costs. FY25 guidance expects margins below 5%.
  - **Other Products**: Gross margin of 14.8%, impacted by poultry and meats business challenges.
- **Outlook**: FY25 net sales growth of 2%, with fresh segment margins targeting 11-13% and banana margins near 4%.

**【Q&A Highlights】**
- **Fresh & Value-Added Segment**: CFO Monica Vicente confirmed 13%+ margins are achievable post-Mann divestiture, with pineapple resilience and selective allocation driving growth.
- **Banana Challenges**: CEO highlighted escalating costs (e.g., $1.30/box for Sigatoka chemicals) and industry-wide supply constraints. FY25 banana margins expected to remain under pressure.
- **Innovation**: CEO announced a new fresh guacamole product line with $8 million in Q3 revenue, showcasing innovation in fresh-cut fruits.
- **Tariffs**: Minimal impact on top line, with costs passed through to customers.
- **Pineapple Expansion**: Long-term plans include Brazilian production (FY28+), positioning for growing global demand.


Fresh Del Monte Produce Inc. (FDP) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

FDP

FDP fundamentals

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