Avocado distributor Calavo's Q4 revenue misses estimates, announces merger

Overview

• Avocado processor's Q4 revenue decreased, missing analyst expectations

• Net income from continuing operations improved, driven by cost management

• Company announces strategic merger with Mission Produce

Outlook

• Calavo expects softer first-quarter results due to strong avocado supply and pricing dynamics

• Company anticipates higher avocado sales volumes but lower average selling prices in Q1 2026

• Calavo aims for volume-driven sales growth and higher gross profit in Prepared segment

Result Drivers

• FRESH SEGMENT DECLINE - Q4 Fresh segment sales fell 31% due to lower avocado prices and volumes, impacting overall revenue

• PREPARED SEGMENT GROWTH - Prepared segment sales rose 20% in Q4, driven by higher sales volume and new customer acquisitions

• COST MANAGEMENT - Lower SG&A expenses contributed to improved net income from continuing operations, despite revenue decline

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the food processing peer group is "buy"

• Wall Street's median 12-month price target for Calavo Growers Inc is $37.00, about 66.7% above its January 13 closing price of $22.20

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 14 three months ago

Press Release: ID:nGNXby7S6W

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