Calavo reports net loss, but revenue growth
Santa Paula-based Calavo Growers saw revenue increase year-over-year in the fourth quarter of 2021, and despite a net loss for the quarter, the company beat analysts’ expectations.
Calavo, an avocado distributor, delivered revenue worth $273.4 million for the quarter ended Oct. 31, a 17% increase from the same quarter a year ago.
The company did suffer a net loss of $13 million, or 73 cents per share, in the fourth quarter of 2021, however, that was primarily due to a $9.7 million impairment from Calavo’s Florida operations, the company said in a news release.
Adjusted net loss was only at $1.8 million, or 8 cents per share as a result.
Both revenue and the company’s adjusted net loss beat Zacks Consensus Estimate’s projection of revenue worth $253.6 million and a loss of 18 cents per share for the quarter.
Calavo shares closed at $43.06 on Dec. 21, up 8.4% from the day before. The company released its quarterly earnings after the markets closed on Dec. 20.
“Early in the fourth quarter, we saw a continuation of the challenging market conditions we experienced in the third quarter including inflationary effects on labor, raw materials and freight,” Steve Hollister, Interim CEO of Calavo Growers, said in a news release.
“We also continued to experience challenges with the avocado crop, including high fruit costs and less desirable sizes.”
Hollister added though that market conditions and supply chain issues caused by the COVID-19 pandemic “improved” as the fourth quarter progressed allowing the company “steady monthly improvement, and we finished the quarter delivering stronger financial results than at the beginning of the quarter.”
Revenue growth was primarily driven by a 26% increase in fresh segment sales as the average selling price of avocados in that segment were 37% higher partially offset by volumes being 7% lower than the prior-year period due to “sub-optimal sizes in August in both California and Mexico.”
Calavo’s renaissance food group and foods segments also increase 7% and 6% year-over-year, respectively.
For the year, Calavo generated $1.1 billion in revenue, nearly the same amount it raised last fiscal year.
The company had a net loss of $11.8 million, 67 cents per share, for the year better than last fiscal year when it had a net loss of $13.6 million, 78 cents per share.
Adjusted net income was $6.2 million, 35 cents per share, down from adjusted net income of $27.6 million or $1.57 per share in fiscal year 2020.
Calavo ended the fiscal year with $2.9 million in cash and cash equivalents with total liquidity at $141.2 million, including unrestricted cash, investments, and borrowings available under a line of credit.
It also ended the year with $44.8 million of total debt, $37.7 million of borrowings under its line of credit and $7.1 million of long-term obligations and finance leases.
NOTE: This article was updated Dec. 21 with Calavo’s closing share price.