Calavo Growers Q1 2023 Earnings Report
Key Takeaways
Calavo Growers reported a decrease in total revenue by 18% year-over-year, with Grown segment revenue declining by 27% and Prepared segment revenue decreasing by 3%. The company experienced a net loss of $(3.1) million, or $(0.17) per diluted share, which is an improvement compared to the previous year's net loss of $(4.0) million, or $(0.23) per diluted share.
Total revenue decreased 18% year-over-year to $226.2 million.
Grown segment revenue decreased 27% year-over-year to $117.7 million.
Prepared segment revenue decreased 3% year-over-year to $108.5 million.
Net loss improved to $(3.1) million, or $(0.17) per diluted share, compared to $(4.0) million, or $(0.23) per diluted share, for the same period last year.
Calavo Growers
Calavo Growers
Calavo Growers Revenue by Segment
Forward Guidance
Calavo Growers anticipates adjusted EBITDA in the range of $40 to $45 million for fiscal year 2023. Grown Segment fiscal 2023 avocado gross margins per case are expected to be at or near the low end of our $3 to $4 target range. Fiscal 2023 gross margins in the fresh cut division will be at or near the low end of the 10%-12% gross margin range exiting fiscal 2023 as volume softness is expected to persist in the near term. Gross margins in the guacamole division are expected to approximate 20% for fiscal 2023.
Positive Outlook
- Grown segment market conditions started to recover in late January.
- Avocado margins realized within targeted range of $3 to $4 per case for most of the second quarter.
- New customer distribution points and volume are still scheduled to launch in the second half.
- Company remains focused on making changes to the business that will deliver ongoing value.
- Restructuring certain corporate and administrative functions to upgrade capabilities and to reduce costs.
Challenges Ahead
- Supply pressure may lead to ongoing volatility in avocado margins.
- Volume softness in Prepared may persist in the near term.
- Data indicates volume sales have been down broadly across retail food categories.
- Operating environment, coupled with first quarter results, has caused company to lower fiscal year margin expectations for both segments.
- Company plans to reduce fiscal 2023 capital expenditures while navigating near-term challenges.