Calavo Growers reported a 15 percent increase in its third quarter revenues but net income fell to $8.8 million, or 50 cents per share, down from $12.7 million and 73 cents per share for the previous third quarter.
The Santa Paula company’s Renaissance Food Group saw a 24 percent increase in revenue, but cost of sales across all segments increased from around 87 percent for the previous third quarter to 91 percent in the most recent quarter. Revenues for the quarter ended July 31 were $301.6 million, and selling, general and administrative expenses also increased slightly.
The tighter margins were a result of a constrained avocado market, CEO Lee Cole said in a news release Sept. 6, as well as the ongoing expansion of the Renaissance arm.
Calavo reiterated its guidance for a double-digit increase in revenues for the full fiscal year, and stated an expectation for 20 percent revenue growth in fiscal 2018.
“We marked two notable operating milestones in our fiscal third quarter,” Cole said. “First, our new fresh avocado packinghouse in Jalisco, Mexico began production, initially shipping avocados to Calavo customers in Japan, Canada and Europe. And second, our newest RFG facility, located in Riverside, Calif., began its first full month of production during the quarter, ramping up to meet customer demand in the southwestern United States.”
The company surpassed $1 billion in 12-month revenue, he added, and expects to post $1.1 billion in sales at the end of the year. It had $8.87 million in cash and cash equivalents, with $124.5 million in current liabilities.
Shares for Calavo ended the day up 4 percent, or $2.65, at $69 even.
• Contact Marissa Nall at [email protected]