Shares of produce marketer Calavo Growers surged more than 7 percent in midday trading on Monday as the firm’s second-quarter profits surged 205 percent to $6.7 million, setting a quarterly earnings record.
The Santa Paula-based firm’s second-quarter revenue jumped to $194.9 million, a 17.2 percent increase over the same quarter a year earlier. Calavo also reported double-digit year-over-year revenue growth for all three of its business units. Diluted earnings per share rose 186.7 percent to 43 cents.
With the California avocado harvest damaged by a record statewide drought, Calavo imported more of its fruit from Mexico to help offset the difference. Gross margins for its fresh products division, which accounts for the majority of the company’s revenue, increase 137 percent to $9.7 million even as unit volume fell to 5 million, compared to 5.9 million a year earlier.
“As forecast and previously reported, our best-in-class, diversified fresh avocado sourcing capability has stepped up supply from Mexico to offset the small California harvest this year,” Calavo CEO, President and Chairman Lee Cole said in a statement. “ The limited domestic harvest is constraining industry volume growth at present.”
Last month, Calavo secured $10 million in funding for FreshRealm, its Internet-based food distribution platform that it plans to launch in California later this summer.