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FRESH DEL MONTE PRODUCE INC (FDP)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered mixed results: net sales were $1.02B (+0.2% YoY), but GAAP diluted EPS was a loss of $0.61 due to $55.5M in impairments; on an adjusted basis, diluted EPS was $0.69, reflecting core profitability and excluding Mann Packing and impairment impacts .
  • Against Wall Street consensus from S&P Global, FDP posted a strong EPS beat but slight revenue miss: EPS $0.69 vs $0.50 consensus; revenue $1.02B vs $1.04B consensus; only one published estimate was available for each metric (*) [Values retrieved from S&P Global].
  • Strategic portfolio actions advanced: agreement to divest Mann Packing to Church Brothers (expected close Q4 2025), and exit of underperforming Philippines banana farms to improve long-term margin profile .
  • Guidance maintained for ~2% FY net sales growth and tightened operational targets: Fresh & Value-Added (F&VA) gross margin 11–13% (ex-Mann), Banana margin approaching ~4%, SG&A $205–$207M; CapEx lowered to $60–$70M (from $70–$80M) and operating cash flow raised to $190–$200M (from $180–$190M) .
  • Capital allocation continues: $0.30 dividend declared and $7.2M repurchases (201,514 shares) in Q3; long-term debt reduced to ~$173M, supporting a cleaner balance sheet and flexibility .

What Went Well and What Went Wrong

What Went Well

  • F&VA segment margin expanded: adjusted gross margin rose to 13.9% driven by pineapple strength and fresh-cut fruit; management targets sustaining low-to-mid-teens margins in F&VA .
    “We saw continued gross margin expansion in our fresh and value-added product segment, and our pineapple program continues to perform well.” — CEO Mohammad Abu‑Ghazaleh .
  • Strategic portfolio optimization: agreement to divest Mann Packing (church Brothers to acquire key assets; Gonzales facility leased back), sharpening focus on higher-margin categories and improving capital efficiency .
  • Cash generation and de‑leveraging: operating cash flow reached $234.2M YTD; long-term debt fell to ~$173.0M, preserving balance sheet strength .

What Went Wrong

  • Banana margin compression: banana gross margin dropped to 1.3% on higher production/procurement costs (weather), increased distribution, and an allowance against an Asia receivable; adjusted gross margin 1.2% .
  • GAAP loss driven by charges: $55.5M in asset impairments (Philippines banana farms $37.2M; Mann $17.9M) and lower gross profit led to operating loss of $21.8M and GAAP net loss of $29.1M .
  • Avocado pricing pressure: industry supply drove lower per-unit prices, reducing F&VA net sales despite margins holding relatively steady on lower input costs; retail prices not fully reflecting input declines, limiting volume uplift .

Financial Results

Quarterly Trend (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Net Sales ($USD Millions)$1,098.4 $1,182.5 $1,021.9
Gross Profit ($USD Millions)$92.2 $120.1 $80.8
Gross Margin % (as reported)8.4% 10.2% 7.9%
Operating Income (Loss) ($USD Millions)$44.9 $68.3 ($21.8)
Diluted EPS (GAAP) ($)$0.64 $1.18 ($0.61)
Adjusted Diluted EPS ($)$0.63 $1.23 $0.69
EBITDA ($USD Millions)$62.1 $94.9 ($2.3)
Adjusted EBITDA ($USD Millions)$61.3 $95.4 $58.0

YoY Snapshot

MetricQ3 2024Q3 2025
Net Sales ($USD Millions)$1,019.5 $1,021.9
Gross Profit ($USD Millions)$93.8 $80.8
Gross Margin % (as reported)9.2% 7.9%
Diluted EPS (GAAP) ($)$0.88 ($0.61)
Adjusted Diluted EPS ($)$0.89 $0.69

Segment Breakdown (Q3 2025 vs Q3 2024)

SegmentNet Sales Q3 2024 ($MM)Net Sales Q3 2025 ($MM)Gross Profit Q3 2024 ($MM)Gross Profit Q3 2025 ($MM)Gross Margin Q3 2024Gross Margin Q3 2025
Fresh & Value-Added$623.7 $610.5 $63.3 $68.3 10.1% 11.2%
Banana$345.3 $358.0 $21.3 $4.6 6.2% 1.3%
Other Products & Services$50.5 $53.4 $9.2 $7.9 18.2% 14.8%
Total$1,019.5 $1,021.9 $93.8 $80.8 9.2% 7.9%

KPIs and Capital Allocation (oldest → newest)

KPIQ1 2025Q2 2025Q3 2025
Net Cash from Operating Activities ($MM, YTD)$46.1 $159.2 $234.2
Long-Term Debt ($MM)$233.0 $201.0 $173.0
Dividend Declared per Share ($)$0.30 $0.30 $0.30
Share Repurchases$7.6M / 253,850 sh. None $7.2M / 201,514 sh.
Cash & Cash Equivalents ($MM)$34.4 $85.5 $97.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales Growth (YoY)FY 2025~2% (prior) ~2% (maintained) Maintained
F&VA Gross Margin (ex-Mann)FY 2025n/a11–13% New detail
Banana Gross MarginFY 2025Historical 5–7% (context) ~4% (compression) Lower vs historical
Other Products & Services GMFY 2025n/a10–12% New detail
SG&A ($MM)FY 2025n/a$205–$207 New detail
CapEx ($MM)FY 2025$70–$80 $60–$70 Lowered
Net Cash from Ops ($MM)FY 2025$180–$190 $190–$200 Raised
Mann Packing DivestitureClose timingn/aExpected Q4 2025 New milestone
DividendQ4 2025n/a$0.30 declared Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
F&VA margin focusF&VA gross margin up to 10.1%; pricing/mix benefits F&VA gross margin 11.7%; pineapple, fresh-cut strength Adjusted F&VA GM 13.9%; sustained low-to-mid-teens target Improving
Pineapple programPricing and margin tailwind Specialty varieties driving growth Demand > supply; stable costs; Brazil expansion underway Positive, capacity building
Banana disease/costLower volumes; higher costs Weather/costs; margins down to 7.3% TR4 escalation; Black Sigatoka costs; margin ~1.3% Q3, ~4% FY target Deteriorating
Tariffs/FXFX headwinds; pricing actions Tariff-related price adjustments; FX tailwinds Tariffs passed through; CEO: minimal net top-line impact Neutral
Supply chain/logisticsWeather/logistics issues in NA Distribution costs elevated Shipping delays/port congestion pressuring costs Persistent headwind
AI/technologyForward-looking mention of AI, biofertilizers Continued emphasis in forward-looking Not highlighted this quarterDeprioritized in near-term commentary
Portfolio actionsStreamlining F&VA ops (Fresh Leaf Farms sale) Efficiency actions; vessel sales Mann divestiture; vessel sales; banana farm exits Accelerating

Management Commentary

  • “We delivered another quarter of strategic progress...exiting underperforming banana operations in the Philippines and divesting Mann Packing...position us to deliver stronger earnings and sustained value for our shareholders.” — CEO Mohammad Abu‑Ghazaleh .
  • “We recorded $56 million in impairments — $18 million related to Mann divestiture and $37 million tied to underperforming banana farms in the Philippines — enabling resource reallocation to more productive channels.” — CFO Monica Vicente .
  • “Fresh‑cut performed very well...we expect to continue with strong performance.” — IR VP Christine Cannella (Q&A) .
  • “We continue to expect net sales growth of ~2% YoY...F&VA gross margin 11–13% ex‑Mann; Banana margin approaching ~4%; SG&A $205–$207M; CapEx $60–$70M; operating cash flow $190–$200M.” — CFO Monica Vicente .

Q&A Highlights

  • F&VA margin durability: Analyst probed whether 13% adjusted GM is the “new normal”; CFO guided to 11–13% with confidence as Mann exits .
  • Pineapple outlook: CEO highlighted robust demand, limited land expansion, stable costs vs bananas, and Brazil MD2 development for future capacity .
  • Avocado pricing dynamics: CEO/CFO noted prices halved YoY from $60–$80 to ~$30–$50 per box; margins held given lower input costs, but retail prices not reflecting declines, limiting volume uplift .
  • Banana economics and industry disease: CEO detailed TR4 spread and rising Black Sigatoka costs; expectation that margins compress and potential future supply shocks; association of producers aims at practice improvements, not pricing coordination .
  • Tariffs: CFO did not quantify; CEO characterized impact as minimal .

Estimates Context

MetricConsensus (S&P Global)*ActualSurprise
Revenue ($USD Billions)$1.041*$1.022 -$0.019 (miss)*
Adjusted Diluted EPS ($)$0.50*$0.69 +$0.19 (beat)*
# of Estimates (EPS / Revenue)1 / 1*n/aLimited breadth*

Note: Values retrieved from S&P Global (*). The breadth of estimates (1) limits the statistical strength of the consensus.

Key Takeaways for Investors

  • Core margin story intact in F&VA: Adjusted F&VA GM at 13.9% underscores mix/pricing power in pineapple and fresh‑cut; ex‑Mann portfolio should support sustained low‑to‑mid‑teens margins .
  • Banana headwinds likely persist: Disease/weather and logistics costs compress margins; management prioritizes margin over volume with FY banana GM ~4% target .
  • EPS quality vs GAAP: Large GAAP impairments created a GAAP loss; adjusted EPS beat highlights underlying profitability ex special items; monitor non‑GAAP adjustments and Mann close timing .
  • Cash generation and de‑leveraging: Strong YTD cash flow and reduced long-term debt (~$173M) provide room for dividend continuity and opportunistic buybacks .
  • Near-term stock catalysts: Mann divestiture closing in Q4, visible F&VA margin trajectory, and any updates on banana disease impacts or pineapple capacity progress (Brazil) .
  • Watch estimate revisions: Given EPS beat and revenue miss, Street may raise margin/earnings forecasts while keeping a cautious stance on banana segment revenues; limited consensus coverage increases idiosyncratic forecast risk (*).
  • Execution priorities: Deliver on guidance (CapEx discipline, SG&A range, cash flow uptick), sustain F&VA margin, and mitigate banana segment costs amid persistent disease/logistics pressures .