Why did Calavo shares fall today?

The avocado producer largely failed to meet forecasts.

It’s been a lousy week for Calavo shares; after the company filed its fourth-quarter earnings report, its stock plunged today as it missed estimates.

Calavo Growers, a provider of fresh ready-to-eat foods and a global avocado company, reported financial results for its fiscal fourth quarter and fiscal year ending October 31, 2022.

Calavo Growers posted quarterly earnings of $0.03 per share, falling well short of the Zacks Estimate, which expected approximately $0.37 per share. 

Compared to a loss of $0.08 per share a year ago, adjusted for non-recurring items.

This quarterly report was quite surprising, showing that the company’s revenues declined 11% to $243.6 million, well below estimates of $298 million.

In addition, the company is under pressure from plummeting avocado prices, which fell 20%, and volumes also fell 4%. As reported by Fool.com

How has the avocado company responded to this situation?

Brian. W. Kocher, president and chief executive officer of Calavo Growers, Inc., said, “In the fourth quarter, we generated sequential and year-over-year improvements in total company gross profit and adjusted EBITDA led by our Prepared segment with the guacamole and fresh-cut fruit and vegetable divisions contributing to the continued momentum,” 

He also said, “Earnings were tempered by the Grown segment, which had a slower than anticipated recovery from the challenging market conditions that occurred late in the third quarter.”

What will be Calavo shares’ future?

There is no clear future for Calavo stock at this time, but one safe option that can help investors address this is the company’s earnings outlook, including the current consensus earnings expectations for the coming quarters and how these expectations have changed recently.

And while Calavo could have spoken more clearly about the new fiscal year, they said they expect the Mexican avocado crop to be 10% to 20% larger this year. That should continue to weigh on prices, although the company still targets a gross profit of $3 to $4 per box of avocados.

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