Calavo Growers, Inc. reported an all-time record quarter, in which fiscal 2019 second quarter net income rose 16 percent on an eight percent increase in revenues from the corresponding period last year on a strong performance in the company’s core fresh-avocado business. The global avocado-industry leader and expanding provider of value-added fresh food also said it posted higher revenues, gross profit, operating income and adjusted net income in the initial six months of the year.
For the three months ended April 30, 2019, Calavo reported net income of $16.3 million, equal to $0.93 per diluted share. Excluding certain items impacting comparability, the company reported adjusted net income(1) of $16.2 million, equal to $0.92 per adjusted diluted share, which compares with $14.1 million, or $0.80 per adjusted diluted share, in the corresponding quarter last year.
Revenues in the second quarter advanced eight percent to $286.2 million from $264.4 million in the same period a year ago. Gross profit rose by 15 percent to $36.8 million, equal to 12.9 percent of revenues, from $32.0 million, or 12.1 percent of revenues, in the year-ago second quarter. Calavo’s operating income climbed by 21 percent to $23.1 million from $19.1 million last year.
Chairman, President and Chief Executive Officer Lee E. Cole stated: “Calavo delivered all-time record operating performance in the second quarter, with higher total revenues pacing our double-digit percentage increases in gross profit, operating income, net income and diluted earnings per share.
“The leading contributor to these results was our Fresh segment, especially our core avocado business, which registered yet another outstanding performance. Avocado unit volume and gross profit increased significantly year over year—indicative of consumer demand that continues to track strongly. I previously expressed optimism and confidence about the prospects for our Fresh segment for this year and for the longer term, due to the world-class global avocado operation we have built. The second quarter performance is gratifying validation that our initiatives to develop dynamic sourcing, production and sales management have enabled this business to prosper and generate sustained, strong results.”
Cole continued: “The company’s Renaissance Food Group (RFG) business segment posted a nine percent increase in sales over the second quarter last year in spite of several headwinds. As expected, challenges related to raw-material quality, price and availability that emerged late in the first quarter continued to impact both sales and profitability during the most-recent period. Additionally, RFG encountered unexpected challenges during the second quarter at one of its co-packers related primarily to a food-safety issue.
