Calavo Swings to Profit on Strong Nine-Month Sales Growth

TL;DR

**CVGW is back in the green, but watch those avocado sales — the Prepared segment is picking up the slack.**

AI Summary

CALAVO GROWERS INC (CVGW) reported a net income of $16.11 million for the nine months ended July 31, 2025, a significant turnaround from a net loss of $0.92 million in the prior-year period. Net sales increased by 6.5% to $523.75 million for the nine-month period, up from $491.59 million in 2024. However, for the three months ended July 31, 2025, net sales slightly decreased to $178.82 million from $179.60 million in the same period last year. Gross profit for the nine months ended July 31, 2025, rose to $52.02 million from $51.51 million, while operating income surged to $21.34 million from $13.71 million. The company's Fresh segment, renamed from 'Grown' in Q1 2025, saw avocado sales decrease to $147.34 million in the three months ended July 31, 2025, from $151.81 million in the prior year, while Prepared segment guacamole sales increased to $24.25 million from $18.39 million. Cash and cash equivalents increased to $63.75 million as of July 31, 2025, from $57.03 million at October 31, 2024, driven by $19.23 million in net cash provided by operating activities.

Why It Matters

This filing shows CALAVO GROWERS INC is successfully navigating a challenging market, turning a net loss into a substantial profit for the nine-month period. This financial improvement could signal increased stability for investors and potentially lead to future dividend growth, as evidenced by the $0.20 per share dividend declared. For employees, improved financial health often translates to job security and potential for growth. Customers may benefit from a more stable supply chain and continued product innovation in the competitive fresh produce and prepared foods sectors. The company's ability to increase net sales and operating income, despite a slight dip in quarterly sales, demonstrates resilience in a market sensitive to commodity price volatility and supply chain disruptions.

Risk Assessment

Risk Level: medium — The company faces medium risk due to volatility in avocado and raw material prices, as explicitly stated in the forward-looking statements. Additionally, the decrease in avocado sales from $151.81 million to $147.34 million in the Fresh segment for the three months ended July 31, 2025, indicates ongoing commodity price sensitivity. The company also highlights risks related to legal and tax proceedings in Mexico, including the recovery of IVA receivables and resolution of assessments by the Mexican Tax Administration Service ('SAT').

Analyst Insight

Investors should monitor CALAVO GROWERS INC's continued performance in its Prepared segment, which showed strong growth in guacamole sales. While the overall nine-month results are positive, the slight decline in quarterly net sales and avocado sales warrants attention. Consider this a hold, but keep an eye on commodity price trends and the resolution of Mexican tax matters.

Financial Highlights

debt To Equity

0.12

revenue

$523.75M

operating Margin

4.1%

total Assets

$301.25M

total Debt

$35.66M

net Income

$16.11M

eps

$0.90

gross Margin

9.9%

cash Position

$63.75M

revenue Growth

+6.5%

Revenue Breakdown

Key Numbers

• $16.11M — Net income (for the nine months ended July 31, 2025, up from a net loss of $0.92 million in 2024)
• $523.75M — Net sales (for the nine months ended July 31, 2025, a 6.5% increase from $491.59 million in 2024)
• $178.82M — Net sales (for the three months ended July 31, 2025, a slight decrease from $179.60 million in 2024)
• $52.02M — Gross profit (for the nine months ended July 31, 2025, up from $51.51 million in 2024)
• $21.34M — Operating income (for the nine months ended July 31, 2025, a significant increase from $13.71 million in 2024)
• $63.75M — Cash and cash equivalents (as of July 31, 2025, up from $57.03 million at October 31, 2024)
• $19.23M — Net cash provided by operating activities (for the nine months ended July 31, 2025)
• $0.20 — Dividend per share (declared to shareholders for the three months ended July 31, 2025)
• $24.25M — Guacamole sales (for the three months ended July 31, 2025, up from $18.39 million in 2024)
• $147.34M — Avocado sales (for the three months ended July 31, 2025, down from $151.81 million in 2024)

Key Players & Entities

• CALAVO GROWERS INC (company) — registrant
• SEC (regulator) — Securities and Exchange Commission
• Nasdaq Global Select Market (company) — exchange where common stock is registered
• Mexican Tax Administration Service (regulator) — SAT, involved in legal and tax proceedings
• FASB (regulator) — Financial Accounting Standards Board
• U.S. Food and Drug Administration (regulator) — involved in regulatory scrutiny and inspection protocols
• Avocados de Jalisco (company) — noncontrolling interest
• Agricola Belher (company) — supplier

FAQ

Risk Factors

• Dependence on Avocado Market Conditions [high — market]: The company's performance is heavily reliant on the volatile avocado market, including pricing and availability. For the three months ended July 31, 2025, avocado sales decreased to $147.34 million from $151.81 million in the prior year, indicating sensitivity to market fluctuations.
• Supply Chain and Sourcing Risks [medium — operational]: Calavo sources avocados from various regions, including California and Mexico. Disruptions in these supply chains due to weather, geopolitical issues, or agricultural factors could impact product availability and cost. The company's ability to manage these diverse sourcing operations is critical.
• Food Safety and Regulatory Compliance [medium — regulatory]: As a food producer and distributor, Calavo is subject to stringent food safety regulations. Any failure to comply with these regulations or any product recalls could lead to significant financial penalties, reputational damage, and operational disruptions.
• Foreign Currency Fluctuations [low — financial]: The company engages in international sourcing and distribution, exposing it to foreign currency exchange rate risks. For the nine months ended July 31, 2025, the company reported a foreign currency loss of $2.488 million, highlighting the impact of these fluctuations.

Industry Context

Calavo Growers operates in the highly competitive fresh and processed produce market, with a strong focus on avocados. The industry is characterized by seasonal fluctuations, global sourcing complexities, and increasing consumer demand for healthy, convenient food options like guacamole. Key competitors include other large-scale avocado distributors and processors, as well as private label brands.

Regulatory Implications

The company faces significant regulatory oversight related to food safety, import/export regulations, and agricultural practices. Compliance with these evolving standards is crucial to avoid penalties and maintain market access. Any changes in trade policies or food safety legislation could impact Calavo's operations and profitability.

What Investors Should Do

1. Monitor avocado pricing and supply chain stability.
2. Assess the growth trajectory of the Prepared segment.
3. Evaluate the impact of foreign currency fluctuations.
4. Analyze operating expense management.

Key Dates

• 2025-07-31: End of Nine-Month Period — Reported net income of $16.11 million, a significant turnaround from a net loss in the prior year, and net sales of $523.75 million, up 6.5%.
• 2025-07-31: End of Three-Month Period — Net sales slightly decreased to $178.82 million, while guacamole sales increased significantly, offsetting a decrease in avocado sales.
• 2025-07-31: Declaration of Dividend — Declared a dividend of $0.20 per share, indicating a return of capital to shareholders.
• 2024-10-31: Fiscal Year End — Previous fiscal year-end balance sheet figures used for comparison, showing cash and cash equivalents of $57.03 million.

Glossary

Operating income

Profitability from a company's core business operations before accounting for interest and taxes. (Surged to $21.34 million for the nine months ended July 31, 2025, from $13.71 million in the prior year, indicating improved operational efficiency.)

Gross profit

Revenue minus the cost of goods sold. (Increased slightly to $52.02 million for the nine months ended July 31, 2025, from $51.51 million, showing stable profitability on core product sales.)

Net sales

Total revenue generated from sales after deducting returns, allowances, and discounts. (Grew 6.5% to $523.75 million for the nine months ended July 31, 2025, demonstrating top-line growth, though a slight decrease was observed in the most recent quarter.)

Noncontrolling interest

The portion of equity interest in a subsidiary that is not attributable to the parent company. (Stood at $1.576 million as of July 31, 2025, a slight increase from $1.444 million at October 31, 2024.)

Retained earnings

The cumulative amount of net income that a company has retained over time, rather than distributing as dividends. (Increased to $27.603 million as of July 31, 2025, from $22.341 million at October 31, 2024, reflecting accumulated profitability.)

Foreign currency loss

Losses incurred due to fluctuations in exchange rates when a company deals with transactions in foreign currencies. (Reported as $(2.488) million for the nine months ended July 31, 2025, impacting overall profitability.)

Year-Over-Year Comparison

Calavo Growers Inc. has shown a strong financial turnaround in the nine months ended July 31, 2025, with net income shifting from a loss of $0.92 million to a profit of $16.11 million. Net sales for this period increased by 6.5% to $523.75 million, driven by overall volume growth. Operating income saw a substantial rise to $21.34 million from $13.71 million, indicating improved operational efficiency. However, the most recent quarter (three months ended July 31, 2025) showed a slight dip in net sales to $178.82 million from $179.60 million, with a decline in avocado sales offset by strong growth in guacamole sales. Cash position improved to $63.75 million, supported by positive operating cash flows.

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value per share CVGW Nasdaq Glo

Filing Documents

• cvgw-20250731x10q.htm (10-Q) — 1636KB
• cvgw-20250731xex31d1.htm (EX-31.1) — 14KB
• cvgw-20250731xex31d2.htm (EX-31.2) — 14KB
• cvgw-20250731xex32d1.htm (EX-32.1) — 10KB
• 0001558370-25-011971.txt ( ) — 6354KB
• cvgw-20250731.xsd (EX-101.SCH) — 32KB
• cvgw-20250731_cal.xml (EX-101.CAL) — 57KB
• cvgw-20250731_def.xml (EX-101.DEF) — 130KB
• cvgw-20250731_lab.xml (EX-101.LAB) — 326KB
• cvgw-20250731_pre.xml (EX-101.PRE) — 233KB
• cvgw-20250731x10q_htm.xml (XML) — 1142KB

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2, contains statements relating to future events and results of Calavo Growers, Inc. and its consolidated subsidiaries ("Calavo," the "Company," "we," "us" or "our") that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks, uncertainties, and assumptions, are based on current expectations, and are not guarantees of future performance. If any of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may differ materially from those expressed or implied in the forward-looking statements. All statements other than historical facts are forward-looking statements, including but not limited to: Projections of revenue, gross profit, expenses, net sales, income/loss from unconsolidated entities, earnings per share, tax provisions, cash flows, and exchange rates; The impact of acquisitions, equity investments, or other financial transactions; Management's plans and objectives for future operations, including restructuring and integration efforts; Commentary on macroeconomic trends or global events and their potential impact on Calavo's performance; Updates on legal matters, investigations, or tax disputes;

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements: Condensed Consolidated Balance Sheets –July 31, 2025 and October 31, 2024 (Unaudited) 4 Condensed Consolidated Statements of Operations – Three and Nine Months Ended July 31, 2025 and 2024 (Unaudited) 5 Condensed Consolidated Statements of Cash Flows – Nine Months Ended July 31, 2025 and 2024 (Unaudited) 6 Condensed Consolidated Statements of Shareholders' Equity – Three and Nine Months Ended July 31, 2025 and 2024 (Unaudited) 7 Notes to Condensed Consolidated Financial Statements (Unaudited) 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 19 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 27 Item 4.

Controls and Procedures

Controls and Procedures 27

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 27 Item 1A.

Risk Factors

Risk Factors 28 Item 5. Other Information 29 Item 6. Exhibits 29

Signatures

Signatures 30 3 Table of Contents

FINANCIAL INFORMATIO N

PART I. FINANCIAL INFORMATIO N

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CALAVO GROWERS, INC. CONDENSED CONSOLIDATED BALANCE SHEET S (UNAUDITED) (in thousands) July 31, October 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 63,754 $ 57,031 Accounts receivable, net of allowances of $ 3,430 (2025) and $ 3,624 (2024) 41,467 41,909 Inventories 30,328 34,157 Prepaid expenses and other current assets 8,411 9,976 Advances to suppliers 14,216 14,570 Income taxes receivable 936 936 Total current assets 159,112 158,579 Property, plant, and equipment, net 50,603 54,200 Operating lease right-of-use assets 16,813 18,316 Investments in unconsolidated entities 2,602 2,424 Deferred income tax assets 7,473 7,473 Goodwill 10,211 10,211 Other assets 54,435 49,916 Total assets $ 301,249 $ 301,119 Liabilities and shareholders' equity Current liabilities: Payable to growers $ 31,849 $ 18,377 Trade accounts payable 9,772 8,742 Accrued expenses 10,459 28,149 Income tax payable 1,721 2,767 Other current liabilities 11,000 11,000 Current portion of operating leases 3,479 3,296 Current portion of finance leases 921 874 Total current liabilities 69,201 73,205 Long-term liabilities: Long-term portion of operating leases 15,594 17,476 Long-term portion of finance leases 4,211 4,274 Other long-term liabilities 4,243 4,388 Total long-term liabilities 24,048 26,138 Commitments and contingencies (Note 6) Shareholders' equity: Common stock ($ 0.001 par value, 100,000 shares authorized; 17,853 (2025) and 17,802 (2024) shares issued and outstanding) 18 18 Additional paid-in capital 178,803 177,973 Retained earnings 27,603 22,341 Total Calavo Growers, Inc shareholders' equity 206,424 200,332 Noncontrolling interest 1,576 1,444 Total shareholders' equity 208,000 201,776 Total liabilities and shareholders' equity $ 301,249 $ 301,119

Business

Business Calavo Growers, Inc. ("Calavo," the "Company," "we," "us," or "our") is a global leader in sourcing, packing and distribution of fresh avocados, tomatoes, papayas and processing of guacamole and other avocado products. Drawing on decades of expertise with fresh and prepared produce, we deliver a broad portfolio of products to retail grocers, club and mass-merchandise stores, foodservice operators, and wholesalers worldwide. We procure avocados from California, Mexico, and other key growing regions. Across our operating facilities, we (i) sort, pack, ripen, and ship avocados, tomatoes, and Hawaiian-grown papayas and (ii) process and package fresh and frozen guacamole. Our products are distributed both domestically and internationally. In the first quarter of fiscal 2025, we renamed our "Grown" reportable segment to "Fresh" to better reflect its activities; the change did not affect the segment's composition, financial results, or internal performance metrics. We report results under two segments: Fresh and Prepared. Basis of Presentation The accompanying unaudited condensed consolidated financial statements (the "interim financial statements") have been prepared by the Company in accordance with accounting principles generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, the accompanying interim financial statements contain all adjustments, consisting of adjustments of a normal recurring nature necessary to present fairly the Company's financial position, results of operations and cash flows. The results of operations for interim periods are not necessarily indicative of the results that may be expected for a full year. These statements should

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