Calavo Growers (NASDAQ: CVGW) reported Q1 EPS of $0.74, $0.19 better than the analyst estimate of $0.55. Revenue for the quarter came in at $258 million versus the consensus estimate of $260.3 million.

Outlook

CEO Cole stated that Calavo moves forward in a “strong position and remains on target to post record revenues and double-digit increases in adjusted diluted earnings per share in fiscal 2019.”

Cole continued: “We are extremely confident and optimistic about the course ahead in our Fresh business segment. Overall industry supply set new records this Super Bowl season, another indication that consumer demand for avocados continues to rise. As important, though, is that we saw strong post-Superbowl demand, which provides a positive early indicator heading into our fiscal second quarter. As an industry leader, with our strong portfolio of resources and diversified sourcing model, we are well positioned to take advantage of this category’s growth and expect Calavo avocado unit sales volume to rise by double digits once again this year.

“RFG’s ability to grow its sales in spite of a recent series of broader industry challenges leaves us confident in the business segment’s ability to deliver double-digit top-line growth during fiscal 2019. However, these industry challenges—including the high cost, poor quality/yield raw-material environment—had a much more significant impact on our profitability in the fiscal first quarter than we typically experience over winter seasons. And so, as we chart a course of customer conversations for a more balanced approach on product pricing, we will also continue to seek profit gains from better plant capacity utilization and further in-plant automation. While we remain confident that these initiatives will be beneficial, we are now anticipating that our year-over-year growth in gross profit will not achieve the levels previously forecast until the second half of fiscal 2019.

“With respect to Calavo Foods, we continue to be deeply gratified by the growth in this business segment, both in terms of revenue and gross profit. We continue to forecast double-digit top-line growth in the segment for fiscal 2019 and anticipate a slight uptick in gross margin percentage for the full year as compared with last year, resulting in mid-teen growth in gross margin dollars. While this segment is a consistent performer, we nonetheless continuously evaluate options for accelerating expansion.

“I remain enthusiastic about FreshRealm—an unconsolidated subsidiary in which Calavo continues to hold a significant ownership stake. My enthusiasm is primarily supported by a meaningful new contract that FreshRealm signed last quarter to supply a large multi-national, multi-channel retailer, as well as cost saving initiatives inside FreshRealm. Also during the most recent quarter, Calavo completed its previously disclosed debt-financing and extended additional new loans to FreshRealm, primarily to support this budding customer relationship and other growth.

“Calavo’s businesses are executing well and we are excited about the course ahead in fiscal 2019 and beyond. With our deep breadth of resources—operating, financial and human capital—as well as planned initiatives during the current year, we think the future looks exceedingly positive and I am eagerly anticipating reporting on the company’s continued progress,” Cole concluded.

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