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Strong sales lift Calavo's third quarter revenue by 15%
Calavo Growers today reported record fiscal 2017 third quarter revenues, which rose by 15 percent from the corresponding period last year.
The company, a major player in the global avocado industry, said top-line growth was paced by strong sales gains in each of Calavo’s three principal business segments – Fresh, Renaissance Food Group (RFG) and Calavo Foods.
Net income for the three months ended July 31, 2017 totaled $8.8 million, equal to $0.50 cents per diluted share. This compares with net income of $12.7 million, or $0.73 per diluted share, in the fiscal 2016 third quarter. Revenues in the most recent quarter reached $301.6 million – marking a new all-time, single-period high – versus $263.1 million in the year-earlier period.
Gross margin totaled $24.9 million, or 8.2 percent of revenues, in the fiscal 2017 third quarter, down from $32.6 million, or 12.4 percent of revenues, in the like quarter last year. Operating income of $12.2 million in the most recent period compares with $20.4 million in last year’s third quarter.
Chairman, President and Chief Executive Officer Lee E. Cole stated: “The company experienced lower gross margin and net income in the quarter due to an avocado crop in transition and costs related to RFG’s rapid expansion. While EPS growth is always a key focus for the company, Calavo’s record third quarter revenues and double-digit growth is both gratifying and indicative of the strategic opportunity ahead in each of our business segments.”
The CEO continued: “In Calavo’s Fresh segment, we continued to operate in a market in which consumer demand continues to exceed available supply. However, the cyclically lower California fruit harvest – down over 40 percent from last year – created a difficult comparison to the fiscal 2016 third quarter. In spite of this difficult comparison, our Fresh segment registered solid year-over-year revenue growth of approximately 8 percent."
“RFG posted sales gains of 24 percent over last year’s third quarter, marking the business segment’s 24th consecutive quarter of double-digit sales growth. The pace of RFG’s revenue growth continues to accelerate, reflecting the growth in consumer demand for fresh, convenient food and Calavo’s corresponding reinvestment into the business segment over the last two years. RFG gross margin experienced the effect of higher costs associated with recently opened production centers starting to scale and attain operating efficiencies.
For more information:
Lee E. Cole
Tel: +1 805 525 1245
Publication date: 9/11/2017
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