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Jul 31, 2025
Calavo Growers Q3 2025 Earnings Report
Calavo Growers reported its third fiscal quarter 2025 financial results, with total net sales slightly decreasing, while the Prepared segment showed strong growth, and the Fresh segment was impacted by an FDA detention hold.
Key Takeaways
Calavo Growers experienced a mixed third quarter in 2025. While total net sales remained relatively flat, the Fresh segment saw a decline in sales and gross profit due to lower avocado and tomato volumes and significant costs from an FDA detention hold. In contrast, the Prepared segment delivered strong growth in both sales and gross profit, driven by increased volumes and improved operational efficiency. The company's net income and EPS decreased, but adjusted net income and adjusted EBITDA increased year-over-year.
Total net sales for Q3 2025 were $178.8 million, a decrease of less than one percent from the prior year.
The Fresh segment's sales decreased by 5% to $155.9 million, primarily due to an 8% decrease in cartons sold and a $4.2 million impact from an FDA detention hold.
The Prepared segment's sales increased by 40% to $22.9 million, driven by a 35% increase in sales volume.
Net income from continuing operations attributable to Calavo Growers, Inc. was $4.7 million, or $0.26 per diluted share, down from $5.4 million, or $0.30 per diluted share, in the prior year.
Revenue by Segment
Forward Guidance
Calavo Growers anticipates continued growth, particularly in its Prepared segment, with the resolution of the FDA matter and a favorable legal development in Mexico expected to positively impact future performance.
Positive Outlook
- The FDA detention hold on avocado imports has been resolved as of September 2, 2025, and is believed to be a non-recurring event.
- A Federal Court in Mexico formally recognized Calavo de Mexico as a maquila, which is expected to strengthen the position to recover value-added tax (IVA) receivables and bolster defense in a 2013 assessment.
- The Prepared segment shows strong momentum, with July sales annualizing to over $100 million and projected sales of approximately $115 million for fiscal 2026.
- Improved operational efficiency and stronger cost management in the Prepared segment are expected to continue.
- Reduction in professional and consulting fees, including lower FCPA investigation-related legal expenses, is contributing to decreased SG&A expenses.
Challenges Ahead
- The Fresh segment was adversely affected by lower avocado selling prices due to converging supply from Mexico, California, and Peru.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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