Although it shipped similar volumes of avocados in the first quarter of fiscal 2012 as it did in 2011, revenues for Calavo Growers Inc. fresh business in the quarter ending Jan. 31 were down 12%, coming in at $71.1 million.
Overall, the Santa Paulo, Calif., company reported revenue growth of 29% for the first quarter. The revenue of $117.4 million included $35 million from Renaissance Food Group, which Calavo acquired June 1, 2011.
Lee Cole, president and chief executive officer, said in a statement to stockholders the main cause of the fresh drop was lower avocado prices from October 2011 through January 2012.
Cole said Calavo’s fresh tomato volumes were also off.
“A shortfall in fresh tomato unit volume in the fiscal 2012 first quarter, … impacted gross margin and tempered results during an otherwise-solid initial period,” Cole’s statement said.
Calavo’s total fresh segment volume, including pineapples and papayas, was down 9% at 3.2 million units, compared to 3.5 million units in the first quarter of 2011. However, Cole told stockholders he is “extremely optimistic” for the rest of 2012.
Fresh avocados are forecast at 1.4 billion pounds. That, combined with good volumes and prices from Mexico in the first quarter, suggest this year will be more profitable, Cole said in the statement.
Also, Cole expects Calavo’s diversified fresh produce performance to improve because of anticipated higher tomato volumes. He expects papayas and pineapples to “contribute incrementally” to Calavo’s fresh units and margins.
In preparation for expected growth, Calavo is doubling its avocado packing capacity in Michoacan, Mexico. The expansion is scheduled for completion in July and will be able to handle 600 million pounds of fruit.