Calavo Growers, Inc. reported first‑quarter 2026 financial results for the period ended January 31, 2026, with net sales of $122.2 million, a 20.8% decline from the $154.4 million reported in the same quarter a year earlier. Fresh‑segment sales fell 25% to $104.7 million, driven by a 35% drop in average avocado selling prices and a 48% decline in tomato sales. The Prepared segment grew 20% to $17.5 million, supported by a 21% increase in pounds sold. Gross profit for the quarter was $15.2 million, or 12% of net sales, up from $15.7 million, or 10% of net sales, a year earlier. Fresh‑segment gross profit declined 15% to $10.3 million, while Prepared‑segment gross profit rose 36% to $4.9 million, reflecting lower fruit input costs and improved operating efficiencies. Selling, general, and administrative expenses totaled $16.4 million, up from $10.3 million a year earlier, largely due to $7.2 million of non‑recurring transaction‑related costs. Adjusted net income was $4.8 million, or $0.27 per diluted share, versus $6.3 million, or $0.35 per diluted share, a year earlier. Adjusted EBITDA was $8.0 million, down from $9.3 million a year earlier. The company ended the quarter with $47.7 million in cash and cash equivalents and $79.8 million in available liquidity, with no debt on its revolving credit facility.
Calavo’s revenue decline was largely a result of pricing pressure in the Fresh segment. The 35% fall in average avocado selling prices, combined with a 48% drop in tomato sales, reduced Fresh‑segment revenue by $30 million. In contrast, the Prepared segment’s 20% sales growth was driven by a 21% increase in pounds sold, offsetting the Fresh‑segment weakness. The company’s gross‑profit margin expanded to 12% of net sales from 10% a year earlier, a gain largely attributable to the Prepared segment’s lower input costs and operational efficiencies. Fresh‑segment gross margin contracted, reflecting the impact of lower avocado prices, while the Prepared segment’s margin improved as volume and cost efficiencies offset the higher mix of lower‑margin products.
The adjusted earnings per share of $0.27 beat the consensus estimate of $0.22, a $0.05 or 23% beat, while revenue of $122.1 million missed the consensus estimate of $131.1 million by $9 million. The earnings beat was driven by disciplined cost management and the Prepared segment’s margin expansion, which helped offset the Fresh‑segment pricing pressure. The revenue miss reflects the significant decline in Fresh‑segment sales and the broader market pricing environment for avocados.
"Across the first fiscal quarter, we saw sequential improvement in both our Fresh and Prepared segments. In Fresh, we executed well around seasonal demand, including Super Bowl‑related retail opportunities, increasing sales volumes substantially over the prior year while maintaining solid per‑unit margins in a pressured pricing environment. Our Prepared segment continued to demonstrate strong momentum in the quarter." "We are also making progress on our previously announced merger with Mission Produce. We completed several required merger related filings, including our initial antitrust submissions in the U.S. and Mexico, and a preliminary joint proxy statement. We remain focused on closing the transaction in the third fiscal quarter of 2026, subject to regulatory and shareholder approvals."
Investors noted the EPS beat and margin expansion, while the revenue miss and 21% year‑over‑year decline in net sales tempered enthusiasm. The market reaction was mixed, with analysts weighing the company’s disciplined cost control and Prepared‑segment growth against the Fresh‑segment pricing headwinds and the impact of one‑time merger‑related expenses.
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