With the help from higher prices and the resilience of its avocado business, Calavo Growers (NASDAQ:CVGW) reported better-than-expected results for FQ3, driving shares higher in Monday’s after-hours trading.
“Our third quarter results reflect continued momentum in our flagship avocado business,” CEO Lee Cole said, adding that despite temporary supply disruptions from Mexico, “we generated strong financial results due to our operational flexibility and resilient team.
“Our momentum has carried into the fourth quarter, and we look forward to delivering solid financial results for the fourth quarter and fiscal year. We intend to deploy the cash that we generated from the sale of our Fresh Cut business by investing in our core avocado and guacamole businesses and by returning cash to shareholders over time.”
With the extra cash, the company doubled its quarterly dividend to $0.20 per share, payable on October 30 to shareholders of record as of October 2.
For the fiscal quarter ended July 31, the company earned an adjusted profit of $0.57 per share, up from $0.43 a year ago and 14 cents better than expected, on a 12% gain in sales. Adjusted EBITDA increased slightly to $13.5M, although gross profit as a percentage of sales declined 250 basis points to 11.2%.
By segment, grown sales were up 13.3% to $163.2M while prepared sales were down 2.4% to $16.4M Gross profits for both segments dropped to $18.2M and $1.9M, respectively. The average selling price of avocados in the grown segment increased 25% from a year ago.
