Calavo Growers Reports Decrease in Net Income and Sales Amid Merger with Mission Produce

Calavo Growers, Inc. reported a net income of $804,000 for the three months ended January 31, 2026, a significant decrease from $4.4 million in the same period last year. The company's net sales fell to $122.2 million, down 21% from $154.4 million in the prior year, primarily due to a 35% decrease in the average selling price per avocado carton, despite a 17% increase in avocado carton volume. The Fresh segment, which includes avocados, tomatoes, and papayas, saw a 25% decline in sales, while the Prepared segment, which includes guacamole and related products, experienced a 20% increase in sales, reflecting stronger demand and expanded customer relationships.

The company's gross profit for the quarter was $15.2 million, a decrease of 3% compared to $15.7 million in the previous year. The decline in gross profit was largely attributed to lower pricing in the Fresh segment, particularly for avocados and tomatoes, which was partially offset by improved profitability in the Prepared segment. Selling, general, and administrative expenses surged by 59% to $16.4 million, driven by merger-related costs associated with the pending merger with Mission Produce, as well as increased stock-based compensation and other non-recurring expenses.

Calavo's total assets increased to $298.2 million as of January 31, 2026, compared to $292.2 million at the end of the previous fiscal year. The company reported a rise in accounts receivable and inventories, reflecting higher inventory volumes of Mexican avocados. Current liabilities also increased, primarily due to higher payables to growers and accrued expenses. The company’s cash and cash equivalents decreased to $47.7 million from $61.2 million, influenced by cash used in operating activities amounting to $8.7 million during the quarter.

In terms of strategic developments, Calavo Growers is in the process of merging with Mission Produce, with no material changes to the merger agreement reported during the quarter. The company also declared a quarterly cash dividend of $0.20 per share, totaling $3.6 million, to shareholders of record on January 13, 2026. Looking ahead, Calavo aims to strengthen its partnerships with growers and enhance relationships with retail and foodservice customers to support long-term growth across both segments, despite the challenges posed by market conditions and pricing pressures.