Calavo Growers (CVGW) Tops Q4 EPS by 1c, Offers Outlook

Calavo Growers (NASDAQ: CVGW) reported Q4 EPS of $0.45, $0.01 better than the analyst estimate of $0.44. Revenue for the quarter came in at $292.2 million versus the consensus estimate of $300 million.

Outlook:

Commenting on the course ahead, CEO Cole stated: “Building upon our record-setting year, Calavo begins fiscal 2020 in an enviable position – financially, operationally and through our depth of human capital and other resources – from which we can continue to drive the company’s growth moving forward.

“The extended upward arc in consumer demand for fresh avocados is expected to be met in 2020 with an all-source U.S. supply that, by early industry estimates, should be more than 10 percent above the recently concluded year. With ample supply, we anticipate considerable opportunities to boost Calavo’s avocado sales both domestically and abroad while continuing to leverage our ability to execute across a range of industry conditions.”

The Calavo CEO continued: “In the RFG segment, we expect improved profit performance across our entire, company-controlled, manufacturing footprint. While we anticipate some continued moderation of sales in the Midwest (due to constraints previously noted with our co-packer in the region), we expect positive sales growth overall. With this improved manufacturing performance, we are anticipating over 60 percent growth in gross profit in fiscal 2020.

“For our Calavo Foods segment, we expect that a larger avocado crop and manufacturing efficiencies derived from several internal initiatives largely completed during our most recent quarter will drive considerable improvement in gross profit. And while sales growth fell short of expectations in fiscal 2019, we believe growth will once again reach the double-digit levels experienced in the past. Combining these two factors, we are anticipating more than 40 percent growth in gross profit in fiscal 2020.

“FreshRealm, the unconsolidated subsidiary in which Calavo holds a minority ownership stake, made some progress in the quarter, with net sales and net losses both trending favorably on a sequential quarter basis. The strategic roll-out plans of FreshRealm’s existing retail customers are expected to accelerate across fiscal 2020 and so we will monitor their progress closely over the coming quarters.

“Calavo’s strategic blueprint continues to serve us well – we will build upon this foundation without deviating from the course that has enabled our strong, enduring performance. Our multiple revenue and profit engines are going to continue driving this success, and I am confident that Calavo will once again post a record top line and double-digit growth in adjusted diluted earnings per share in the current year. We look forward to reporting our progress to these ends as fiscal 2020 advances,” Cole concluded.

For earnings history and earnings-related data on Calavo Growers (CVGW) click here.

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