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FRESH DEL MONTE PRODUCE INC (FDP)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered mixed headline results: net sales $1.10B down 0.9% YoY, gross profit up 12% to $92.2M and gross margin expanded 100 bps to 8.4% driven by Fresh & Value-Added; GAAP diluted EPS $0.64 and adjusted diluted EPS $0.63 .
  • Versus S&P Global consensus, EPS slightly beat ($0.63 vs $0.615*) while revenue missed ($1,098.4M vs $1,118.5M*); strength in pineapples, fresh-cut fruit, and avocados offset banana weakness and FX headwinds .
  • Management reaffirmed segment margin targets and SG&A/CapEx ranges but lowered FY 2025 operating cash flow guidance to $180–$190M from $190–$200M previously, citing evolving tariff/macro conditions; dividend maintained at $0.30 and $7.6M of buybacks executed .
  • Near-term stock reaction catalysts: narrative of demand exceeding supply in core categories (pineapple, avocados, fresh-cut), execution on Mann Packing consolidation savings, and clarity on tariff pass-through; watch for banana segment recovery and FX impacts .

What Went Well and What Went Wrong

What Went Well

  • Fresh & Value-Added margin expansion: segment gross margin rose to 10.1% (from 8.3% YoY); management reiterated a path to low-teens margins over time as mix improves .
  • Operational resilience amid shipping constraints: “we have been able to move products with minimal to no delays” due to vertically integrated logistics; demand continues to exceed supply in pineapples and fresh-cut .
  • Strategic progress in avocados/specialty ingredients: majority stake in Avolio to convert non-whole-grade fruit into premium avocado oil, scaling to 140 MT/day, targeting a fast-growing, higher-margin market .

What Went Wrong

  • Banana segment pressure: net sales down to $363.8M (YoY: $379.5M), gross margin compressed to 4.6% (from 5.7%) on lower Asia demand, excess supply, weather logistics in North America, and weaker EUR/KRW .
  • FX headwinds and reduced gains: Other expense fell vs. prior year, but lower gain on asset disposal constrained operating income growth (adjusted OI up more meaningfully) .
  • Guidance sensitivity to tariffs: FY 2025 operating cash flow range lowered to $180–$190M, with CFO highlighting evolving tariff/geopolitical environment as a monitoring area .

Financial Results

Quarterly Trend (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Net Sales ($USD Millions)$1,019.5 $1,013.2 $1,098.4
Diluted EPS ($USD)$0.88 $0.42 $0.64
Adjusted Diluted EPS ($USD)$0.77 $0.26 $0.63
Gross Margin %9.2% 6.8% 8.4%
Adjusted EBITDA ($USD Millions)$68.3 $35.2 $61.3
Adjusted EBITDA Margin %6.7% 3.5% 5.6%
Net Income Margin %4.1% 2.0% 2.8%

Q1 YoY Comparison

MetricQ1 2024Q1 2025
Net Sales ($USD Millions)$1,107.9 $1,098.4
Gross Profit ($USD Millions)$82.3 $92.2
Gross Margin %7.4% 8.4%
Operating Income ($USD Millions)$44.1 $44.9
Adjusted Operating Income ($USD Millions)$30.6 $44.1
Net Income Attributable to FDP ($USD Millions)$26.1 $31.1
Adjusted FDP Net Income ($USD Millions)$15.8 $30.3
Diluted EPS ($USD)$0.55 $0.64
Adjusted Diluted EPS ($USD)$0.34 $0.63
Cash from Operations ($USD Millions)$18.7 $46.1
SG&A ($USD Millions)$50.7 $48.1

Segment Breakdown (Q1)

SegmentNet Sales ($USD Millions)Gross Profit ($USD Millions)Gross Margin %
Fresh & Value-Added (Q1 2024)$676.8 $55.9 8.3%
Fresh & Value-Added (Q1 2025)$683.2 $69.3 10.1%
Banana (Q1 2024)$379.5 $21.8 5.7%
Banana (Q1 2025)$363.8 $16.8 4.6%
Other Products & Services (Q1 2024)$51.6 $4.6 8.9%
Other Products & Services (Q1 2025)$51.4 $6.1 11.9%

KPIs

KPIQ4 2024Q1 2025
Net Cash Provided by Operating Activities ($USD Millions)—$46.1
Capital Expenditures ($USD Millions)—$10.0
Long-Term Debt ($USD Millions)$244.0 $233.0
Quarterly Dividend per Share ($USD)$0.30 (declared Feb 21 for Mar 28) $0.30 (declared Apr 29 for Jun 6)
Share Repurchase ($USD Millions / Shares)—$7.6 / 253,850 shares at $29.97 avg

Estimates vs Actual (Q1 2025)

MetricConsensusActual
Revenue ($USD Millions)1,118.5*1,098.4
Primary EPS ($USD)0.615*0.63 (Adj. diluted EPS) ; GAAP diluted 0.64

Values retrieved from S&P Global.*

Interpretation: EPS beat by ~2% vs consensus, while revenue missed by ~1.8%—reflecting mix strength in Fresh & Value-Added against banana/FX headwinds .

Guidance Changes

MetricPeriodPrevious Guidance (Q4 call)Current Guidance (Q1 call)Change
Net Sales growth YoYFY 2025~+2% YoY ~+2% YoY Maintained
Fresh & Value-Added Gross MarginFY 202510%–11% 10%–11% Maintained
Banana Gross MarginFY 20255%–7% 5%–7% Maintained
Other Products & Services Gross MarginFY 202512%–14% 12%–14% Maintained
SG&AFY 2025$205M–$210M $205M–$210M Maintained
CapExFY 2025$80M–$90M $80M–$90M Maintained
Net Cash from OperationsFY 2025$190M–$200M $180M–$190M Lowered
Dividend per QuarterCY 2025$0.30 (declared for Mar payment) $0.30 (declared Apr 29 for Jun payment) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3 2024; Q-1: Q4 2024)Current Period (Q1 2025)Trend
Pineapple demand/innovationDemand > supply; Rubyglow launch; double-digit segment margins ambition “Demand once again exceeded supply”; pricing confidence; supply expansion across geographies Strengthening, pricing firm
Avocado programGrowth driver; diversified sourcing (Chile/Peru/Colombia); fresh guacamole momentum Avolio acquisition to monetize byproducts into avocado oil; diversified sourcing (Peru/Colombia) Expanding into higher-margin oil
Fresh-cut operationsFacility consolidation in Asia/UK expansion; Mann consolidation savings $15–$20M in 2025 Continued rationalization; margins improving; double-digit fresh-cut momentum Efficiency gains continuing
Supply chain/logisticsResilience through integration; limited ILA strike impact; hurricanes reroutes “Minimal to no delays” despite global constraints; weather disruptions noted Resilient operations
Tariffs/macroWatch macro; FX headwinds; banana competitiveness Monitoring 10% baseline tariffs; cooperative mitigation with buyers Risk to H2 cash flows
Regulatory (FSMA 204)Early compliance; competitive advantage; Jan 2026 deadline readiness Reinforced execution benefits to supply chain trust and growth Structural advantage
Biomass/biofertilizersEarly-stage initiatives; Kenya plant trials; high-20s margin businesses targeted Vision 2025–2027 to monetize residues; specialty ingredients ramp Long-term margin mix tailwind
Banana segmentVolume/pricing down; FX; cost inflation; Somalia project to improve proximity Asia demand weakness; FX; weather logistics; margin 4.6% Persistent headwind near term

Management Commentary

  • CEO: “Demand once again exceeded supply in our fresh and value-added products segment… our improvement in gross profit—up 12%—and gross margin to 8.4% reflects the success of our strategy” .
  • CEO: “We have been able to move products with minimal to no delays… giving our customers service continuity that few can match” .
  • CFO: “Adjusted diluted EPS was $0.63; adjusted operating income $44M… adjusted EBITDA $61M or ~6% of net sales” .
  • CEO on avocados/specialty ingredients: “Acquiring Avolio… transforms agricultural byproducts into high-impact solutions… position us to compete in higher-margin categories” .

Q&A Highlights

  • Demand resilience: “We don't see any reductions in demand… disruptions sometimes open opportunities for us” (fresh produce categories) .
  • Tariffs pass-through: Company is “mitigating… with buyers” to avoid consumer impact; cooperative approach to tariff changes .
  • Avocado trajectory: Category “doing very well,” diversified sourcing beyond Mexico; fresh guacamole growing double-digit QoQ .
  • Pineapple supply/demand: Consumption growth and favorable price/value vs other fruits underpin demand; health/wellness benefits cited .

Estimates Context

  • Q1 2025: Primary EPS consensus $0.615* vs actual $0.63 (adjusted diluted) and $0.64 GAAP; EPS beat .
  • Q1 2025: Revenue consensus $1,118.5M* vs actual $1,098.4M; revenue miss .
  • Forward quarters: Consensus implies normalization with Q2/Q3 2025 stronger seasonality (EPS 0.95/0.50*; revenue $1,157.5M/$1,041.3M*), aligning with management’s segment margin targets and mix narrative .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Core mix strength: Fresh & Value-Added drove margin expansion (10.1% segment GM) and adjusted EPS upside; focus on pineapples, fresh-cut fruit, and avocados remains the profit engine .
  • Watch banana/FX headwinds: Banana margin compressed to 4.6% on Asia demand/supply imbalance and weaker EUR/KRW; recovery path depends on sourcing diversification and macro stabilization .
  • Cash flow guide trimmed: FY 2025 operating cash flow now $180–$190M (from $190–$200M), reflecting tariff/geopolitical uncertainty; monitor quarterly conversion vs working capital swings .
  • Capital returns intact: Dividend held at $0.30 and $7.6M buybacks in Q1 with $142.4M authorization remaining—a supportive backdrop to equity value .
  • Execution catalysts: Mann Packing consolidation ($15–$20M annual savings) and logistics resilience should support margin trajectory and mitigate disruptions .
  • Strategic upside: Avolio acquisition and biomass/specialty ingredient initiatives expand into higher-margin adjacencies, enhancing long-term ROIC and margin mix .
  • Near-term trading lens: Balance EPS beat vs revenue miss; sensitivity to tariff outcomes and banana segment dynamics could drive volatility—positive skew if pineapple pricing remains firm and fresh-cut growth persists .
Non-GAAP adjustments: Q1 2025 adjusted figures exclude $0.8M gain on idle land sale in Guatemala; prior-year adjusted figures exclude insurance credits and asset impairment/other charges (with tax effects per ASC 740) **[1047340_f890c6f76564409bbdfca7e7276fa92c_1]** **[1047340_f890c6f76564409bbdfca7e7276fa92c_9]** **[1047340_0001047340-25-000068_april302025-earningspr.htm:6]** **[1047340_f890c6f76564409bbdfca7e7276fa92c_11]**.