Calavo Growers Inc.âs quarterly profit more than doubled, and the avocado marketer said it expects continued growth in 2011 amid expanding demand and ample supplies.
Fresh avocado sales grew by double digits in 2010, Lee Cole, Calavoâs chief executive officer, said in a Jan. 3 statement. Calavo, based in Santa Paula, Calif., shipped nearly 300 million pounds of fresh avocados last year, up 37% from the previous year, Cole said.
âI anticipate another strong year for Calavo,â Cole said in the statement. âThe fresh avocado pipeline is expected to be substantialâ¦ (and) our global sourcing capabilities will ensure our ability to meet customer demand with a steady supply of fruit.â
Calavoâs shipments probably will continue rising, Cole said, as stepped-up industry promotions and health trends fuel avocado consumption. With Calavoâs global sources, âwe view ourselves as well positioned to benefit from this market expansion longer term,â Cole said.
The company is also pursuing growth through acquisitions, he said.
Avocados have grown increasingly popular as a sandwich and salad ingredient and as a vegetarian cuisine. Additionally, the U.S. Agriculture Department has allowed Mexican avocados into new markets, supplementing supplies from California and Chile.
U.S. per-capita avocado consumption rose by an average annual rate of 10% over the past decade, the second-fastest growth among fruits next to blueberries, the USDA said last year. The USDA estimated consumption in the 2009-10 marketing year at a record 4 pounds per person.
Calavoâs profit improved over 2010 after lower than expected avocado shipments from Mexico hurt results.
During the three months ending Oct. 31, Calavoâs fiscal 2010 fourth quarter, net income was $4.75 million, the company said. That was up from $2.3 million during the same period a year earlier. On a per-share basis, earnings rose to 32 cents from 16 cents.
Sales during the fourth quarter rose 33% to $107.2 million. For the full year, Calavoâs revenue rose 16% to a record $398.4 million.
Calavoâs sales volumes âwere very solidâ during the fourth quarter, BB&T Capital Markets analyst Heather Jones said in a Jan. 3 report. Strong volume growth probably continued into the current quarter âas shipments from Mexico have rebounded nicely,â Jones said.
âRecent rains in California have grabbed headlines,â Jones said. âHowever, we do not see any risk at this time as wet weather should favorably impact the 2011 crop and should also help to restore ground water supplies, which could positively affect 2012 supplies.â
Jones has a âbuyâ rating on Calavo shares, which fell 2 cents to $23.68 in early trading today. The stock rose 37% last year.
Cole said sales in other businesses, including diversified produce and the CalavoFoods unit, were also strong.
âWe witnessed growth last year in tomatoes and refrigerated fresh guacamole, two categories in which the company has worked diligently to expand over the past several years,â Cole said.
Calavo is âproactively pursuing external growth through acquisitions,â Cole said in the statement.
âWe have specific criteria, seeking only companies that fit into our strategic framework, can be immediately accretive to per-share results and are complementary to our current revenue growth and increasing gross-margin profile,â he said.
In February, Calavo purchased 65% Lisaâs Salsa Co., St. Paul, Minn., and introduced the Salsa Lisa label in May for foodservice and retail customers.