U.S.: Net income rises five-fold for Calavo Growers in Q3
Calavo Growers (NYSE:CVGW) has notched the highest revenues and gross margins for any quarter in its history for the three months ending July 31, with net income more than five times greater year-on-year at US$8.6 million.
The company highlighted revenue growth of 6.3% for the period to reach US$232.5 million, ahead of an expected total U.S. avocado consumption of 2.5 billion pounds next year, up 25% on expectations for 2015.
This trend bodes well for Calavo's expansion plans, which involve the establishment of a new facility in Florida that is set to open in December, focused on forging a stronger presence in the country's southeast in avocados, guacamole and fresh food.
Additionally, a packhouse in a new Mexican growing region - Jalisco - will come online in the first quarter of the 2016 fiscal year.
"These operating results are anchored by the strength of our core fresh avocado business, where we packed 15 percent more units in the most recent period versus the third quarter last year. This upward trend line is indicative of our category leadership in an industry where consumer demand is increasing at an impressive rate," CEO Lee E. Cole said in a release.
"Calavo enters the final quarter of fiscal 2015 in a strong position—operationally and financially—which we view as a good indicator for our company’s direction in fiscal 2016, as well.
"Calavo avocado volume growth, as we previously forecast, continues to track in the solid double-digit range. Our avocado operations in Mexico are performing at a very high level—capitalizing on availability and pricing that has been highly beneficial to Calavo’s performance in the current fiscal year. We do not anticipate that changing in the near term."
Cole forecast a long-term growth period for the avocado sector, and highlighted Calavo's position to build upon its avocado category leadership.
"We expand into a second Mexico growing region via our new packinghouse in Guzman, Jalisco, which will come online in first quarter of fiscal 2016, allowing us to meet the growing demand," he said.
"Jalisco and the new facility are indicative of the growth prospects in the Fresh division, with avocado consumption growth in the U.S. expected to continue for many years into the future.
"I am also pleased to announce that Calavo will be opening a new 208,000 square-foot facility in Jacksonville, Fla., this December. This will be the first fully shared operation between all the major divisions of Calavo—Fresh, Calavo Foods and RFG—and will provide us the base for greater business penetration into Southeastern U.S. markets. Through this facility, we will be able to fully leverage synergies between Calavo business units and expect it to contribute revenue and profit growth over time."