Executive Summary

Q3 2025 delivered resilient profitability despite operational headwinds: GAAP diluted EPS of $0.26 and Adjusted EPS of $0.57; EPS beat consensus ($0.54*) while revenue of $178.8M missed consensus ($192.3M*) .
Prepared segment was the bright spot: net sales +40% YoY to $22.9M and gross profit +201% YoY to $5.8M, driven by ~35% volume growth and operational efficiencies .
Fresh segment margins compressed due to a temporary FDA detention hold on certain avocado imports from Mexico, with ~$4.2M discrete costs; avocado prices were significantly lower sequentially versus Q2 as Mexico/California/Peru supply converged .
Cost discipline continued (SG&A -12% YoY to $9.2M); liquidity strong with $63.8M cash, no revolver borrowings, and total debt of $5.1M; dividend maintained at $0.20 per share for payment on Oct 31, 2025 .
Catalysts: DOJ closed FCPA inquiry (Sept 2), Mexican court recognized Calavo de Mexico as a maquila (supports IVA recovery), and management projects Prepared segment FY2026 sales of ~$115M, reinforcing a mix shift toward higher-quality earnings .

What Went Well and What Went Wrong

What Went Well

Prepared segment acceleration: net sales +40% YoY to $22.9M; gross profit +201% YoY to $5.8M on ~35% volume growth and improved efficiency .
SG&A leverage: expenses fell 12% YoY to $9.2M, mainly lower professional/consulting fees (including reduced FCPA investigation-related legal expenses) .
Governance/legal overhangs eased: “On September 2, 2025, the U.S. Department of Justice officially notified us that it has closed its FCPA inquiry related to our operations in Mexico.” — Lee Cole, CEO .

What Went Wrong

Temporary FDA detention hold drove ~$4.2M of discrete costs (third‑party testing, logistics/handling, inventory write‑downs), depressing Fresh gross profit (Fresh gross profit $12.4M, -32% YoY) .
Volume softness: overall cartons sold -8% YoY; avocado volumes -5% and tomato volumes -27%, pressuring Fresh segment revenue/margins .
FX headwind: foreign currency remeasurement loss of $2.483M in Q3, weighing on below‑the‑line items .

Financial Results

Consolidated Performance (oldest → newest)

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$179.6	$154.4	$190.5	$178.8
Gross Profit ($USD Millions)	$20.1	$15.7	$18.1	$18.2
Gross Margin %	10.0%	10.2%	9.5%	10.0%
SG&A ($USD Millions)	$10.5	$10.3	$10.3	$9.2
Operating Income ($USD Millions)	$9.4	$5.0	$7.6	$8.7
Diluted EPS – Continuing Ops ($)	$0.30	$0.25	$0.38	$0.26
Adjusted EPS ($)	$0.56	$0.33	$0.40	$0.57
EBITDA – Continuing Ops ($USD Millions)	$7.1	$7.3	$11.0	$8.0
Adjusted EBITDA ($USD Millions)	$12.9	$9.3	$11.4	$15.1

Notes: EBITDA/Adjusted EBITDA per company definitions (non-GAAP) and reconciliations .

Segment Breakdown (Q3 YoY)

Metric	Q3 2024	Q3 2025
Fresh Net Sales ($USD Millions)	$163.2	$155.9
Prepared Net Sales ($USD Millions)	$16.4	$23.0
Total Net Sales ($USD Millions)	$179.6	$178.8
Fresh Gross Profit ($USD Millions)	$18.2	$12.4
Prepared Gross Profit ($USD Millions)	$1.9	$5.8
Total Gross Profit ($USD Millions)	$20.1	$18.2

KPIs

KPI	Q3 2025
Overall cartons sold YoY	-8%
Avocado volumes YoY	-5%
Tomato volumes YoY	-27%
Prepared segment volume YoY	+35%
Cash & Cash Equivalents ($USD Millions)	$63.8
Total Debt ($USD Millions)	$5.1
Available Liquidity ($USD Millions)	$114.3

Results vs Wall Street Consensus (S&P Global)

Metric	Consensus	Actual	Surprise
Revenue ($USD Millions)	$192.3*	$178.8	-$13.5 (miss)*
Primary EPS ($)	$0.54*	$0.57 (Adjusted EPS)	+$0.03 (beat)*

Values with asterisk retrieved from S&P Global. EBITDA consensus mean was $14.6M* vs S&P’s recorded actual $10.5M*, noting definitional differences vs company-reported Adjusted EBITDA of $15.1M . Values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q3 2025 (paid 10/31/2025; record 9/30/2025)	$0.20 (Q2 declaration)	$0.20	Maintained
Prepared segment net sales	FY 2026	N/A	~$115M projected	Initiated projection
Prepared segment monthly run-rate	July 2025 (annualized)	N/A	>$100M annualized run-rate	New datapoint

No formal revenue/margin/OpEx/Tax guidance ranges were issued in Q3 materials .

Earnings Call Themes & Trends

(Transcript not found; synthesized from management commentary in press releases)

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Regulatory/legal (FCPA)	Ongoing cooperation; significant professional fees; enforcement priorities shift noted	DOJ closed FCPA inquiry (Sept 2)	Improving; overhang reduced
Mexican tax matters (IVA, SAT)	VAT refund progress; continued proceedings	Calavo de Mexico recognized as maquila; strengthens IVA recovery & defense vs 2013 assessment	Constructive momentum
Supply chain/inspection/tariffs	USDA inspection delays; discrete 3‑day tariff hit ($0.9M)	Temporary FDA detention hold drove ~$4.2M costs; insurance claim submitted	Transitory disruption
Avocado pricing	Q1/Q2 benefited from strong pricing despite lower volumes	Sequentially lower vs Q2 as Mexico/California/Peru supply converged	Normalizing prices
Tomato demand	Adverse weather, abundant domestic supply pressured demand/pricing in H1	Continued pressure; tomato volumes -27% YoY	Weak
Prepared segment	Q1 softness; Q2 set-up for H2 acceleration	Strong growth (sales +40%, volume +35%); FY26 projection ~$115M	Strengthening

Management Commentary

“Our third quarter results highlight both the challenges and the opportunities in our business… third quarter avocado selling prices were significantly lower sequentially versus the second quarter as avocado supply from Mexico, California, and Peru converged. In contrast, our Prepared segment delivered outstanding growth with higher volumes.” — Lee Cole, CEO .
“As of September 2, 2025, the FDA matter has been resolved… we believe it was a non-recurring event.” — Lee Cole .
“A Federal Court in Mexico formally recognized Calavo de Mexico as a maquila, which we believe strengthens our position to recover IVA receivables and bolsters our defense in the 2013 assessment.” — Lee Cole .
“Prepared segment… July sales, on a monthly run-rate basis, annualize to over $100 million and… we currently project Prepared segment sales of approximately $115 million for fiscal 2026.” — Lee Cole .

Q&A Highlights

No Q3 2025 earnings call transcript was found in our document catalog or investor site; we searched SEC/IR portals and third-party aggregators and did not locate a transcript .
Any guidance clarifications or tone changes cannot be assessed from a call transcript due to unavailability.

Estimates Context

EPS beat: Adjusted EPS $0.57 vs consensus $0.54* (+$0.03), despite Fresh headwinds; revenue missed: $178.8M vs $192.3M* (-$13.5M) .
The mix shift toward Prepared and SG&A reductions support EPS resilience; however, consensus revenue may be revised down to reflect FDA-hold impacts and tomato weakness (transitory but tangible). Values retrieved from S&P Global.

Key Takeaways for Investors

EPS resilience and non-GAAP strength: Adjusted EPS $0.57 and Adjusted EBITDA $15.1M reflect cost discipline and Prepared segment momentum, even as Fresh absorbed ~$4.2M unusual FDA-hold costs .
Structural mix improvement: Prepared segment growth (+40% sales, +201% gross profit) and FY26 sales projection (~$115M) suggest a rising contribution from higher-quality earnings streams .
Transitory operational shock likely behind: FDA issue resolved; insurance recovery pursued; expect normalization in Fresh operations, though tomato demand remains a watch item .
Legal/regulatory overhangs reduced: DOJ’s closure of the FCPA inquiry and maquila recognition in Mexico de-risk the story and could unlock IVA recoveries/cash flow .
Liquidity and capital returns: $63.8M cash, no revolver borrowings, and dividend maintained at $0.20 support investor confidence and flexibility for operational investment .
Near-term: Expect sell-side models to lower revenue (Fresh/tomato drag) but maintain/improve EPS on Prepared strength and SG&A discipline; monitor avocado price normalization and FX volatility .
Medium-term: Thesis tilts toward margin stability and Prepared-led growth; any insurance proceeds/IVA recovery would be incremental tailwinds .

Values retrieved from S&P Global.

CALAVO GROWERS INC (CVGW)·Q3 2025 Earnings Summary