Calavo Growers, Inc. (CVGW) is riding high after releasing its third-quarter financial report, sending its shares soaring in after-hours trading. The company exceeded analysts’ expectations on both earnings and revenue, demonstrating strong performance.
Calavo reported earnings of 57 cents per share, surpassing the consensus estimate of 43 cents by a significant 32.56%. Revenue for the quarter reached $179.6 million, also surpassing the analyst consensus estimate of $178.54 million.
The company’s flagship avocado business, known as the Grown segment, saw sales increase by a substantial 13.3%. This impressive growth was fueled by a 25% increase in the average selling price of avocados compared to the previous year. While the Prepared segment, which includes guacamole, saw a 2.4% decrease in sales, it still managed to achieve a 7% increase in volume, showcasing the company’s focus on expanding this business despite headwinds from higher fruit input costs.
Lee Cole, President and CEO of Calavo Growers, expressed his satisfaction with the results: “Our third-quarter results reflect continued momentum in our flagship avocado business. Despite temporary industry supply disruptions from Mexico during the quarter, we generated strong financial results due to our operational flexibility and our resilient team. Although our guacamole business experienced headwinds from higher fruit input costs compared to the third quarter last year, our volume increased 7% due to our focus on growing the business. I am also pleased to share that we will be launching some exciting, innovative guacamole products during the fourth quarter.”
Calavo Growers also announced a 10-cent increase in its cash dividend, bringing it to 20 cents per share. This dividend will be paid on October 30, 2024, to shareholders of record as of October 2, 2024.
The positive financial results and the dividend increase sent Calavo Growers’ shares soaring. According to Benzinga Pro, CVGW shares were up 8.29% after-hours, trading at $25.99 at the time of publication. This strong performance demonstrates investor confidence in the company’s future prospects, particularly its commitment to innovation and growth within its core avocado and guacamole businesses.
