CEO Cole said that Calavo’s start to fiscal 2018 leaves him “confident and optimistic about the company’s path ahead and that it remains on a trajectory to post record revenues and earnings per share” in the current year.
Cole stated: “We continue to see strong fresh avocado demand and it will be met with a larger all-source industry supply that is forecast to increase approximately 20 percent. Avocado consumption—both domestically and internationally—continues to trend upward and we are well-positioned to help satisfy this demand. For these reasons, I am affirming our previous forecast of double-digit revenue growth in the Fresh business segment.
“We expect RFG’s growth rate will trend higher sequentially across the remaining three quarters of fiscal 2018. Similarly, we expect RFG’s gross profit margins to improve sequentially across fiscal 2018 as new retail programs rollout, enabling newer plants to further scale, and the transitory circumstances in Houston subside which we are already beginning to witness. Due to the delays we experienced in the first quarter, we are now anticipating mid-teen growth in net sales and we continue to expect higher growth in gross profit for the full year 2018.”
The Calavo CEO continued: “Calavo Foods is on track to meet our previously forecast double-digit revenue growth this fiscal year. As we move closer to the second half of the year, we anticipate a moderation in our year-over-year raw material costs—which are already lower on a sequential basis—that should result in gross profit margins remaining at more historic levels.
“We turn next to our unconsolidated subsidiary, FreshRealm, LLC, which Calavo seeded and continues to hold a meaningful ownership interest. FreshRealm, utilizing advanced technology, is becoming the leading innovator in delivering meal-kits to the retail and direct-to-consumer marketplaces. Notably, Weight Watchers International recently announced a strategic partnership with FreshRealm to roll out Weight Watchers branded meal kits later in 2018. We are excited about this partnership as well as a number of other significant partnership opportunities FreshRealm has secured or is in the process of developing, and look forward to watching the FreshRealm business grow in 2018.
“With an outstanding first quarter as Calavo’s cornerstone, I expect the company to continue on its path of strong revenue and profit growth as fiscal 2018 progresses. Consequently, I am re-affirming our guidance offered in mid-December that called for double-digit growth in both revenue and earnings per share. In addition, we now anticipate our earnings per share to get a further boost in fiscal 2018 as a result of the new Tax Cuts and Jobs Act, which is expected to lower our effective tax rate for the remainder of fiscal 2018. We look forward to reporting our continued achievements as the year progresses,” Cole concluded.
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For more information:
Lee E. Cole - Chairman, President and CEOCalavo Growers, Inc.
Tel.: +1 (805) 525-1245