Ben Bienvenu's questions to CALAVO GROWERS (CVGW) leadership • Q4 2022
Question
Ben Bienvenu from Stephens inquired about Calavo's 2023 outlook, specifically the cadence of earnings and the targeted 10-12% exit run-rate margin for the Fresh Cut business. He also asked for an explanation of the Grown segment's Q4 volume decline amid industry growth and sought details on the company's long-term strategic plan.
Answer
President and CEO Brian Kocher clarified that the 10-12% Fresh Cut margin is an annualized run rate for 2024, not just a Q4 2023 target. He attributed the Grown segment's Q4 volume decline to a strategic decision to manage margins over volume due to lingering excess Peruvian fruit that depressed prices. Regarding the long-term plan, Kocher stated it will shift the company from stabilization to growth across all segments, guided by return on invested capital, with a particular focus on expanding international sales. CFO Shawn Munsell added that operational improvements in the guacamole division also contributed to the Prepared segment's strong performance.