Why Calavo Growers Stock Is Down Today

stock Kalabo Planter (CVGW -8.78%) The avocado grower was rotting today after reporting lower sales and earnings in the fourth quarter.

As a result, the stock was down 7.7% as of 12:54 PM ET.

Image source: Getty Images.

The collar is shriveled.

Calavo, one of the world’s largest avocado producers, said sales for the quarter fell 1% to $241.2 million, missing the consensus of $252.4 million.

The growth segment, which is primarily avocados but also includes other produce such as tomatoes, saw sales rise 5.6% to $125.7 million. Avocado sales decreased 8.7% as we focused on pricing, which increased gross profit from $8.5 million to $8.7 million.

The prepared part suffered. Revenue fell 7.9% to $116.1 million, and total profit for the segment fell from $11.8 million to $6.7 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased from $9.6 million to $7 million. However, loss per share was reported at $0.33 compared to profit per share of $0.03.

“Avocado margins slowed compared to the third quarter due to seasonality and an unfavorable foreign exchange impact of $3 million. However, our margin management discipline led to improved margins compared to the same period last year,” said CEO Lee Cole.

What’s next for Calavo?

The company did not provide guidance for the quarter, but Cole’s comments should encourage investors. Cole, Calavo’s longtime CEO who returned to the CEO role last year, has led the stock’s overall recovery.

Calavo is also in the process of selling its fresh foods business to F&S Fresh Foods, which will help it focus on its core growing segment.

While the quarterly results were disappointing, the recovery story still appears to be intact, with Avocado gross margin in particular moving in the right direction.