Following the release of the company’s fiscal third-quarter results report, Calavo Growers, Inc. (NASDAQ: CVGW) stock value saw a notable boost. During Monday’s regular trading session, CVGW shares closed steadily, but in after-hours trading, they recorded a gain of 7.58% to $25.82.
What Calavo shared?
For the fiscal quarter concluded on July 31, 2024, Calavo had a notable 11.7% increase in total net sales, reaching $179.6 million. Strong avocado margins drove a 13.3% increase in net sales to $163.2 million for the company’s Grown division.
On the other hand, its Prepared sector, which no longer includes the recently closed Fresh Cut firm, saw a 2.4% decline in net sales to $16.4 million. Despite these inconsistent results, Calavo succeeded to report a rise in adjusted EBITDA to $13.5 million and an adjusted net income of $10.2 million, or $0.57 per diluted share.
Prudent Disposition of New Cut Enterprise
On August 15, 2024, Calavo completed the sale of its Fresh Cut division in a calculated move. The company’s newfound focus on its core activities is demonstrated by the decision to sell this division, which was once a part of the Prepared reporting unit with the guacamole business. The company’s remaining debt was retired with the proceeds from the sale, which resulted in a $9.5 million decrease in net debt during the third quarter.
CVGW’s Prospects & Upcoming Projects
Calavo’s success in the third quarter, which was characterized by robust avocado margins and adaptable operations, shows that the firm can withstand short-term supply difficulties from Mexico. A 7% volume gain illustrates Calavo’s dedication to expansion, even though the guacamole industry encountered difficulties as a result of increased fruit input costs.
Calavo is certain that it will generate substantial profits for the upcoming fiscal year and fourth quarter. Additionally, the company intends to realign its emphasis on its avocado and guacamole core businesses, investing the proceeds from the sale of Fresh Cut in these ventures. The corporation doubled its quarterly dividend to $0.20 per share as a result of these events.