SANTA PAULA, Calif. - Calavo Growers , Inc. (NASDAQ:CVGW), recognized for its prominence in the avocado market, disclosed the completion of its Fresh Cut business sale to F&S Fresh Foods. The deal, which includes related real estate, was finalized on Thursday, August 15, for a sum of $83 million, with adjustments expected upon closing.
Lee Cole, President and CEO of Calavo Growers, expressed satisfaction with the conclusion of the sale, emphasizing the company's strategic focus on its primary avocado and guacamole operations. He acknowledged the contributions of the Fresh Cut business team and conveyed his best wishes for their future with F&S Fresh Foods.
F&S Fresh Foods, based in Vineland, New Jersey, is praised by Cole as a reputable industry leader and a longstanding co-packing partner to Calavo. He anticipates that the Fresh Cut business will thrive under F&S's stewardship.
The transaction is a significant strategic shift for Calavo Growers, enabling the firm to concentrate resources and expertise on its core offerings. Investors are advised to look forward to the company's third-quarter earnings report, which is scheduled to be announced on September 9, 2024.
Calavo Growers, Inc., founded in 1924 and headquartered in Santa Paula, California, is a global supplier of high-quality produce, including avocados, tomatoes, and papayas. The company operates under the Calavo brand name and various proprietary sub-brands, as well as private label and store brands. Calavo serves a diverse customer base, ranging from retail grocery and foodservice to club stores, mass merchandisers, food distributors, and wholesalers worldwide.
This news is based on a press release statement from Calavo Growers, Inc. The company's forward-looking statements are subject to risks, uncertainties, and assumptions, and actual results may differ materially from those projected. Investors are encouraged to consult the company's most recent filings with the Securities and Exchange Commission for a comprehensive understanding of these risks.
In other recent news, Calavo Growers Inc. has seen a series of significant developments. The company's stock price target was revised from $31 to $25, maintaining a Hold rating, in alignment with avocado market trends and the upcoming sale of its Fresh Cut business. Calavo Growers also reported a substantial beat on earnings and revenue for its fiscal second quarter, with an adjusted EPS of $0.50 and revenue of $184.4 million, surpassing analyst projections.
In addition, the company is undergoing strategic changes, such as the appointment of former CFO John Lindeman to its Board of Directors and Audit Committee. Furthermore, Calavo Growers is nearing the completion of its Fresh Cut business divestiture, scheduled for May 2024, which aligns with the company's strategic realignment plans.
Lastly, the company is updating investors on an internal investigation concerning potential violations of the Foreign Corrupt Practices Act in Mexico. These developments reflect Calavo Growers' commitment to strong corporate governance and strategic growth.
InvestingPro Insights
As Calavo Growers (NASDAQ:CVGW) sharpens its focus on its core avocado and guacamole operations, a closer look at the company's financial health and market performance offers critical insights for investors. According to InvestingPro data, Calavo's market capitalization stands at $418.12 million, reflecting the scale of the business in the current market. Despite facing challenges, such as a negative P/E ratio of -281.69 and an adjusted P/E ratio for the last twelve months as of Q2 2024 at 616.84, which suggest profitability concerns, the company's revenue growth over the same period has been positive at 13.27%. This indicates that Calavo is still expanding its sales despite the pressures on earnings.
Moreover, the company has seen a significant return over the last week, with a price total return of 12.07%, as per InvestingPro metrics. This short-term uptick could signal investor optimism following the recent business divestiture. Additionally, Calavo has maintained dividend payments for 23 consecutive years, with a current dividend yield of 1.7%, which may appeal to income-focused shareholders.
InvestingPro Tips highlight that analysts are expecting net income growth this year for Calavo, which could indicate a turnaround from the previous performance. However, it is worth noting that two analysts have revised their earnings estimates downwards for the upcoming period. This mixed outlook underscores the importance of monitoring the company's forthcoming financial results and market updates for a clearer picture of its trajectory.
For those seeking more in-depth analysis, there are additional InvestingPro Tips available on https://www.investing.com/pro/CVGW, which can provide a more comprehensive understanding of Calavo Growers' financial position and future prospects.
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