Executive Summary

Q4 2024 net sales rose 19.5% year over year to $170.0M, driven by the Grown segment (+23.4%) and a 16% increase in average avocado prices; gross profit increased 14.2% to $16.3M, while gross margin dipped 40bps to 9.6% .
GAAP diluted EPS from continuing operations improved to $(0.14) from $(0.26) in Q4 2023; adjusted net income turned positive to $0.8M ($0.05 per diluted share), but adjusted EBITDA declined 16% to $6.7M on higher incentive compensation .
Strategic repositioning: divested Fresh Cut in August 2024; ended FY with $57.0M cash, no revolver borrowings, and total debt of $5.1M (other long-term obligations/leases), supporting dividend at $0.20/share payable Jan 31, 2025 .
2025 outlook: management anticipates double‑digit growth in avocado/guacamole sales volumes and overall revenue, with Prepared margins expected to improve; tomato gross profit targeted to grow double‑digits YoY despite volume declines .

What Went Well and What Went Wrong

What Went Well

Grown segment gross profit rose 24.1% YoY in Q4 to $14.3M, aided by ~10% higher avocado volume and ~16% higher average prices; management expects steady avocado performance into Q1 (Super Bowl period) despite USDA inspection-hour limitations .
Balance sheet strengthened: $57.0M cash, $108.8M available liquidity; revolver at zero; total debt a modest $5.1M (other long-term obligations/leases) as of Oct 31, 2024 .
Strategic focus: Fresh Cut sale completed Aug 15, 2024; management highlights streamlined SG&A, reduced debt, increased cash, and intent to maintain a higher dividend in 2025 .

Management quotes:

“We made good progress in 2024… net sales increasing ~11%, net income from continuing operations increasing ~36%, and adjusted EBITDA increasing ~11%” .
“Divesting Fresh Cut… strengthened our balance sheet by reducing debt and generating a strong cash position… helped us to reward investors with a higher dividend that we plan to maintain in 2025” .
“We are entering fiscal 2025 with strong momentum… double‑digit growth anticipated in avocado and guacamole sales volumes, as well as overall revenue” .

What Went Wrong

Prepared segment pressure: Q4 gross profit fell to $2.0M; gross margin dropped to 12.9% from 16.1% on higher fruit input costs, though management expects stabilization and margin improvement in FY25 .
Adjusted EBITDA down 16% YoY in Q4 (to $6.7M) largely due to higher incentive compensation; SG&A rose to 7.7% of sales on investigation-related professional fees and compensation .
FX remeasurement losses continued to weigh: Q4 foreign currency loss of $3.0M (non-GAAP adjustment); similar FX headwinds noted in Q3 ($4.2M loss vs $2.0M prior-year gain) .

Financial Results

Consolidated Performance vs Prior Quarters

Metric	Q2 2024 (Apr 30)	Q3 2024 (Jul 31)	Q4 2024 (Oct 31)
Net Sales ($USD Millions)	$184.383	$179.596	$169.959
Gross Profit ($USD Millions)	$20.357	$20.093	$16.290
Gross Margin %	11.0%	11.2%	9.6%
Operating Income ($USD Millions)	$7.135	$9.358	$3.012
Diluted EPS – Continuing Ops ($)	$0.36	$0.30	$(0.14)
Adjusted Net Income ($USD Millions)	$8.900	$10.197	$0.809
Adjusted EPS ($)	$0.50	$0.57	$0.05
EBITDA ($USD Millions)	$10.241	$7.086	$2.295
Adjusted EBITDA ($USD Millions)	$13.445	$13.488	$6.686

Q4 Year-over-Year Comparison (Continuing Operations)

Metric	Q4 2023	Q4 2024	YoY Change
Net Sales ($USD Millions)	$142.204	$169.959	+19.5%
Gross Profit ($USD Millions)	$14.268	$16.290	+14.2%
Gross Margin %	10.0%	9.6%	-40 bps
Diluted EPS – Continuing Ops ($)	$(0.26)	$(0.14)	Improvement
Adjusted EBITDA ($USD Millions)	$7.966	$6.686	-16%

Segment Breakdown – Net Sales

Segment Net Sales ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
Grown	$166.755	$163.218	$154.625
Prepared	$17.628	$16.378	$15.334
Total	$184.383	$179.596	$169.959

Segment Breakdown – Gross Profit

Segment Gross Profit ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
Grown	$16.049	$18.175	$14.310
Prepared	$4.308	$1.918	$1.980
Total	$20.357	$20.093	$16.290

KPIs and Balance Sheet Snapshot

KPI	Q2 2024	Q3 2024	Q4 2024
Cash & Equivalents ($USD Millions)	$4.273	$1.126	$57.031
Line of Credit – Long-term ($USD Millions)	$42.025	$29.919	$0.000
Total Debt (other long-term obligations & finance leases, $USD Millions)	$4.708	$4.514	$5.100
Adjusted EBITDA ($USD Millions)	$13.445	$13.488	$6.686
Dividend per Share ($)	$0.10 declared (Q2 PR)	$0.20 declared (Q3 PR)	$0.20 payable Jan 31, 2025

Guidance Changes

Metric/Item	Period	Previous Guidance	Current Guidance	Change
Avocado & Guacamole Sales Volumes	FY2025	Momentum into Q4, strong results expected in Q4 and FY (Q3 PR)	Double‑digit volume growth expected; overall revenue growth expected FY2025	Raised (directional)
Prepared Segment Margins	FY2025	Sequential improvement in Q4 vs Q3 expected	Expect higher gross margins via operational efficiencies in FY2025	Raised (directional)
Tomato Gross Profit	FY2025	Not explicitly guided	Double‑digit growth in gross profit despite volume declines	New directional guide
Dividend	FY2024–FY2025	Increased to $0.20 per quarter (paid Oct 30, 2024)	$0.20 per quarter declared Dec 30, 2024 and plan to maintain in 2025	Maintained

Earnings Call Themes & Trends

Note: An earnings call transcript for Q4 2024 was not available in our document set; themes are drawn from company press releases and 8‑K materials [ListDocuments returned 0 transcripts].

Topic	Q2 2024 (Prior-2)	Q3 2024 (Prior-1)	Q4 2024 (Current)	Trend
Avocado pricing/margins	Avocado prices +28% YoY; strong margins; prioritizing margin over volume	Avocado prices +25% YoY; margins strong; temporary Mexico supply disruption resolved	Avocado prices +16% YoY; steady performance expected into Q1 (Super Bowl period) despite USDA inspection-hour limits	Improving/stable
Prepared segment input costs	Lower fruit costs, Prepared gross margin up to 24%	Higher fruit costs; margin down to 12%	Higher fruit costs vs prior year, margin 12.9%; stabilization expected and margin improvement in FY25	Pressured then stabilizing
FX remeasurement	Noted in Q2; professional fees related to FCPA increased; FX not highlighted	$4.2M FX loss vs $2.0M prior-year gain; excluded in non-GAAP	$3.0M FX loss; excluded in non-GAAP	Persistent headwind
Investigations (FCPA/internal, SAT tax)	FCPA investigation costs elevated; expected to decline from Q3; Mexican tax matters expenses	Internal investigation costs increased; Mexican tax matters discussed	Investigation-related legal/outside services drove SG&A higher; ongoing Mexican tax matters	Ongoing but managed
Fresh Cut (discontinued)	Sale process underway, target Q3 completion	Sale closed Aug 15; proceeds to reduce debt and return cash to shareholders	Divestiture complete; balance sheet strengthened; strategic focus on core avocado/guacamole	Completed; strategic focus
Tomatoes	Strong performance (volume and prices higher)	Lower tomato gross profit vs prior year on lower volume	Volume decline expected; pricing/margins improvement targeted to drive double‑digit gross profit growth FY25	Mixed; margins targeted to improve

Management Commentary

“Turning to our financial performance for the fourth fiscal quarter, we saw our net loss from continuing operations improve by approximately 48%… driven primarily by favorable movements in our tax rate. Adjusted EBITDA… declined by approximately 16%, primarily reflecting an increase in incentive compensation” .
“We are entering fiscal 2025 with strong momentum… double‑digit growth anticipated in avocado and guacamole sales volumes, as well as overall revenue… supported by cost discipline and efficiencies in SG&A” .
“We anticipate adequate [avocado] volume in January to meet Super Bowl demand despite USDA limitations on inspection hours in Mexico… confident in our supply chain” .

Q&A Highlights

An earnings call transcript for Q4 2024 was not available in our document catalog; therefore Q&A themes and clarifications could not be extracted from a call transcript [ListDocuments for transcripts returned 0].

Estimates Context

Attempted to retrieve Wall Street consensus for Q4 2024 revenue and EPS via S&P Global (Capital IQ); estimates were unavailable due to SPGI access limits at time of query. As a result, comparisons vs consensus could not be provided. If needed, we can refresh and add this section once SPGI access is restored [GetEstimates error].

Key Takeaways for Investors

Grown segment strength persisted with higher avocado prices and margins; this remains the primary earnings driver heading into FY2025, with steady demand around Super Bowl and stable sourcing despite USDA inspection-hour constraints in Mexico .
Prepared segment margins compressed on higher fruit costs in Q4 but are expected to improve in FY2025 with operational efficiencies and product innovation; watch for execution on double‑digit sales volume growth targets .
Balance sheet reset post Fresh Cut divestiture: cash of $57.0M, revolver at zero, modest other debt; supports continued $0.20/share dividend (Jan 31, 2025) and optionality for growth investments .
Non-GAAP adjustments (FX losses, investigation/legal, Mexican tax matters) materially impacted GAAP results; adjusted metrics offer cleaner view but still reflected incentive-comp headwinds in Q4 .
Near-term trading lens: absence of a Q4 call transcript reduces color; narrative hinges on avocado price/volume dynamics and Prepared margin recovery; any updates on investigations or SAT tax matters could move sentiment .
Medium-term thesis: streamlined portfolio and improved liquidity position Calavo to drive double‑digit volume and revenue growth in FY2025, with operating leverage as SG&A efficiencies materialize; monitor tomato gross profit trajectory and FX .
Dividend credibility increased with cash build and debt reduction; continued shareholder returns depend on sustaining margin improvements and managing legal/investigation costs .

CALAVO GROWERS INC (CVGW)·Q4 2024 Earnings Summary