Fresh Del Monte Produce Inc. reported financial results for the first quarter ended March 27, 2020.
Net sales for the first quarter of 2020 were $1,118.0 million, compared with $1,154.2 million in the first quarter of 2019. The decrease in net sales was attributable to lower net sales in all of the Company's business segments. The Company has estimated that the COVID-19 pandemic impacted net sales during the first quarter of 2020 by approximately $27.0 million, in its fresh and value-added and banana business segments, as compared to the Company's expectations for these segments. In addition, the impact of the voluntary product recall at the Company's subsidiary, Mann Packing, in the fourth quarter of 2019 continued to impact net sales, in the fresh and value-added business segment, during the quarter as volumes have not returned to pre-recall levels.
Gross profit for the first quarter of 2020 was $68.5 million, compared with $95.1 million in the first quarter of 2019. Adjusted gross profit in the first quarter of 2020 was $76.5 million, compared with $95.1 million in the first quarter of 2019. The decrease in gross profit was principally due to lower gross profit in the Company's fresh and value-added and banana business segments, partially offset by higher gross profit in the Company's other products and services business segment. Gross profit was also impacted by inventory write-downs of $8.0 million, primarily related to reduced demand in the Company's foodservice distribution channel as a result of government imposed mandatory closures and social distancing initiatives associated with the COVID-19 pandemic, along with higher ocean freight and production and procurement costs.
"We were challenged across our global operations during the first quarter of 2020 as we navigated through the headwinds created by the COVID-19 pandemic,” said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer. “Beginning in January in Asia and ramping up in March, our sales were impacted across all of our markets. However, the Company's global presence in the retail fresh produce industry, the diversity of our product portfolio and the efficiency and flexibility of our operations enabled us to quickly adapt to the COVID-19 pandemic. Near-term demand in our foodservice distribution channel, net sales of higher price point products such as pineapples, avocados and fresh-cut fruit and vegetables remain challenging, but we remain committed to serving our customers without interruption. In terms of liquidity, we believe our cash on hand, availability under our credit facility and cash flows from operations will be sufficient to manage our operations.”
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Fresh Del Monte Produce Inc.
Tel: +1 (305) 520-8433