Executive Summary

Q1 2025 delivered a sharp profitability inflection: net sales rose 21.0% to $154.4M, gross profit expanded 46.2% to $15.7M, and GAAP diluted EPS returned to $0.25 vs $(0.15) in Q1 2024, underpinned by stronger avocado pricing and disciplined SG&A .
Adjusted earnings and cash-generation metrics strengthened materially: adjusted EPS $0.33 and adjusted EBITDA $9.3M, both up more than 200% YoY; management called it the strongest Q1 adjusted net income since 2019 .
Segment mix favored Fresh: Fresh segment sales +23.7% and gross profit +88.8% YoY on ~30.5% higher average price per carton, more than offsetting a 4.6% volume decline; Prepared remained flat with margin pressure from fruit input costs .
Capital returns maintained and expanded: dividend declared at $0.20/share for April 29, 2025, and a $25M share repurchase authorization announced shortly after quarter‑end—potential near-term stock support catalysts .
No formal numerical guidance was issued; management expressed confidence entering peak California season and downplayed near-term tariff impact on operations .

What Went Well and What Went Wrong

What Went Well

Pricing and margin execution: “The pricing strength in our avocado business, combined with disciplined cost management, contributed to a more than 200% increase in Adjusted EBITDA and a return to meaningful profitability.” — CEO Lee Cole .
SG&A discipline: SG&A fell 23.6% to $10.3M (6.7% of sales) on lower headcount and reduced investigation-related fees .
Fresh segment strength: Fresh gross profit rose 88.8% to $12.1M, with avocado gross profit up $5.1M YoY to $11.3M and tomato gross profit +$0.8M to ~$1.0M .

What Went Wrong

Prepared margin pressure: Prepared gross profit declined 17.1% YoY to $3.6M due to higher fruit input costs, despite a 7.3% volume increase and lower ASPs .
FX headwinds: Foreign currency remeasurement loss of $0.962M weighed on reported results in Q1 2025; the company excludes FX remeasurement in non‑GAAP measures for comparability .
Ongoing investigations (FCPA/Tax matters): Continued SEC/DOJ FCPA inquiry cooperation and $0.395M in Mexican tax-related expenses; while activity was postponed, investigations remain an overhang .

Financial Results

Quarterly Trend (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Net Sales ($USD Millions)	$179.6	$170.0	$154.4
Gross Profit ($USD Millions)	$20.1	$16.3	$15.7
SG&A ($USD Millions)	$10.5	$13.0	$10.3
Operating Income ($USD Millions)	$9.4	$3.0	$5.0
Net Income from Continuing Ops ($USD Millions)	$5.4	$(2.5)	$4.4
Diluted EPS (GAAP, Continuing) ($)	$0.30	$(0.14)	$0.25
Adjusted EPS ($)	$0.57	$0.05	$0.33
Adjusted EBITDA ($USD Millions)	$13.5	$6.7	$9.3

YoY Comparison (Q1 2024 vs Q1 2025)

Metric	Q1 2024	Q1 2025
Net Sales ($USD Millions)	$127.6	$154.4
Gross Profit ($USD Millions)	$10.8	$15.7
SG&A ($USD Millions)	$13.5	$10.3
Operating Income ($USD Millions)	$(3.1)	$5.0
Net Income from Continuing Ops ($USD Millions)	$(2.6)	$4.4
Diluted EPS (GAAP, Continuing) ($)	$(0.15)	$0.25
Adjusted EPS ($)	$(0.08)	$0.33
Adjusted EBITDA ($USD Millions)	$3.2	$9.3

Estimates vs Actuals (Q1 2025)

Metric	Consensus	Actual
EPS (Adjusted) ($)	$0.29	$0.33
Revenue ($USD Millions)	NA (Unavailable via SPGI)	$154.4

Note: Wall Street consensus via S&P Global was unavailable to retrieve at time of writing; EPS consensus shown above comes from a third‑party aggregator and may differ from SPGI methodologies .

Segment Breakdown (Q1)

Segment	Net Sales ($USD Millions)	Gross Profit ($USD Millions)	Net Sales YoY	Gross Profit YoY
Fresh (Q1 2025)	$139.8	$12.1	+23.7%	+88.8%
Prepared (Q1 2025)	$14.6	$3.6	Flat	−17.1%
Fresh (Q1 2024)	$113.0	$6.4	—	—
Prepared (Q1 2024)	$14.6	$4.3	—	—

KPIs (Q1 2025 and YoY change)

KPI	Q1 2025	YoY Change
Avocado average price per carton	—	+30.5%
Avocado volume	—	−4.6%
Prepared segment volume	—	+7.3%
Prepared average selling price per pound	—	Lower YoY
Tomato gross profit	~$1.0M	+$0.8M
Tomato volume	—	+7.7%
Gross Margin (%)	10.2%	+180 bps vs 8.4%
SG&A as % of sales	6.7%	−390 bps vs 10.6%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q2 2025 payment (Apr 29, 2025)	$0.20 (maintained from Q4’s increase)	$0.20 declared; record date Apr 1, 2025; payable Apr 29, 2025	Maintained
Revenue/Profitability	FY 2025	Directional confidence entering peak CA season; no formal ranges	No formal numerical guidance; management confident sustaining momentum	Maintained (no numeric guidance)
Tariffs/macro impact	Near term	Not specifically guided	“Do not currently expect [tariffs] to have a meaningful impact”	Clarified minimal impact
Capital allocation	Program horizon	N/A	$25M share repurchase authorization (through Mar 18, 2027)	New program

Earnings Call Themes & Trends

(Transcript not available; themes derived from company releases)

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Avocado pricing & margins	Strong margins despite Mexico supply disruptions; ASP +25% YoY	ASP +16% YoY; margins supported	Pricing strength drove Fresh gross profit; ASP +30.5% YoY	Improving pricing; resilient margins
Prepared/guacamole margins	Higher fruit costs pressured margins; expected improvement in Q4	Fruit costs elevated; margins 12.9% vs 16.1%	Prepared gross profit −17.1% YoY; lower ASPs offset volume growth	Mixed; margin pressure persists
SG&A/cost discipline	SG&A down YoY; restructuring/severance in PY	SG&A increased on investigation fees/incentives	SG&A down 23.6% YoY; lower headcount/professional fees	Positive expense control
FX remeasurement	−$4.2M loss (adjusted out non‑GAAP)	−$3.0M loss; adjusted non‑GAAP	−$0.962M loss; adjusted non‑GAAP	Headwind moderating
Legal/regulatory (FCPA/Tax)	Internal investigation ongoing	Investigation fees $1.0M; SAT matters detailed	Investigation activity postponed; SAT VAT refund ~$0.7M post‑quarter	Reduced near‑term action; tax recovery progress
Tariffs	Not highlighted	Not highlighted	Minimal expected operational impact from Mexico import tariffs	Monitored; not material per mgmt

Management Commentary

“Our strategic focus on margin improvement and operational efficiency is driving tangible results, with Fresh segment sales increasing about 24% and overall net sales up about 21% year-over-year.” — CEO Lee Cole .
“Although tariffs on imports from Mexico introduce additional costs, we do not currently expect them to have a meaningful impact on our operations.” — CEO Lee Cole .
“We also made significant progress in reducing SG&A expenses, reinforcing our commitment to operational discipline and long-term value creation.” — CEO Lee Cole .

Q&A Highlights

The Q1 2025 earnings call transcript was not available in our document catalog, so Q&A highlights and any clarifications provided during the call could not be reviewed [ListDocuments returned none]. Management’s commentary above is sourced from the earnings press release and 8‑K exhibit .

Estimates Context

S&P Global consensus data was unavailable to retrieve at the time of writing (tool access error). External aggregator data indicates adjusted EPS consensus of $0.29 vs actual adjusted EPS of $0.33, implying a beat; revenue estimate was not available from this source .
Given stronger avocado pricing and SG&A reductions, near-term estimates may bias upward for margins/EBITDA; Prepared segment margin trajectory remains the swing factor due to fruit input costs .

Key Takeaways for Investors

Margin-led inflection: Fresh segment pricing strength and SG&A discipline drove a return to GAAP profitability and robust non‑GAAP earnings, with adjusted EBITDA tripling YoY—evidence of improved operational leverage .
Segment mix matters: Fresh is the earnings engine; Prepared is stabilizing but still experiencing margin pressure from fruit costs, making commodity inputs a key watch item .
FX/Investigations overhang moderating: FX losses were smaller than recent quarters; FCPA investigation activity postponed and a positive SAT VAT refund post‑quarter—risk not eliminated but near‑term pressure diminished per management .
Capital returns as support: Maintained $0.20 quarterly dividend and a new $25M buyback authorization post‑quarter offer tangible shareholder return catalysts .
Tariffs watch but low impact: Management does not expect Mexico import tariffs to be meaningful to operations; still prudent to monitor policy shifts and cost pass‑through dynamics .
Near-term setup: Entering peak California season with pricing tailwinds and improved cost structure; track Prepared margin recovery, FX swings, and any regulatory developments for estimate revisions and stock reaction risk .

CALAVO GROWERS INC (CVGW)·Q1 2025 Earnings Summary