Limoneira boosts Q3 operating income despite smaller than expected avocado sizing
Citrus and avocado company Limoneira has managed to increase its third-quarter operating income despite smaller than expected avocado sizing impacting the financial results.
The company expects preliminary operating income for the third quarter of fiscal year 2021 to be in the range of $2.8 million to $4.2 million compared to the same period last year of $1.8 million.
Adjusted EBITDA is set to be in the range of $7.2 million to $8.4 million, compared to same period last year of $6 million. Total net revenue was approximately $49.0 million, compared to $53.6 million.
Limoneira explained that fresh lemon utilization has been strong as expected during the third fiscal quarter; however, supply constraints due to delayed harvests in Argentina and Chile paired with congested ports throughout the world have temporarily delayed shipments of many agriculture products including lemons into the fourth fiscal quarter.
The highly publicized lack of rainfall throughout California and the West coast has reduced the overall size of the actual avocado fruit pieces, resulting in reduced pounds sold for the company’s avocados.
The company said the lack of rainfall has not affected its lemons in Southern California or Arizona thanks to the its water assets as well as the irrigation system for the lemon groves.
“Lemon pricing and utilization was strong for the third quarter; however, this was more than offset by the reduced sizing of our avocado fruit due to lack of rainfall," said Harold Edwards, President and Chief Executive Officer of the Company.
"We also experienced the same global logistical delays in the third quarter that are affecting the entire agriculture industry. Even with these temporary challenges, we increased our Operating Income by approximately 80% in the quarter compared to the prior year and continued to perform extremely well in retail food and club grocery with a gradual improvement in domestic food service.”
During the quarter, Limoneira sold 1.1 million domestic lemon cartons at an approximate average price of $21.35, compared to 1.4 million domestic lemon cartons sold at an average price of $18.22 during the prior year period.