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Calavo Growers’ Revenue and Income Rose in Fiscal 4Q15

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Calavo Growers’ price movement

Yesterday, Calavo Growers (CVGW) reported its earnings for fiscal 4Q15, which ended October 31, 2015. After the report, CVGW fell by 2.3% to close at $49.51 per share. Calavo Growers has a market cap of $860.5 million. The stock’s price movements on weekly, monthly, and YTD bases are 0.92%, -11.8%, and 6.3%, respectively.

Technically, the stock has broken support levels and is trading below all moving day averages. Currently, CVGW is trading 5.7% below its 20-day moving average, 4.2% below its 50-day moving average, and 3.0% below its 200-day moving average.

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The Guggenheim S&P SmallCap 600 Pure Growth ETF (RZG) invests 0.51% of its holdings in Calavo Growers. The ETF tracks an index of US-listed small-cap growth companies. It selects only “pure” growth companies and weights them by style scores. The YTD price movement of RZG is 2.3%. The Vanguard S&P Small-Cap 600 Growth ETF (VIOG) invests 0.24% of its holdings in Calavo Growers.

Calavo Growers’ (CVGW) competitors and their market caps are listed below:

  • Sysco Corporation (SYY)—$23.4 billion
  • Fresh Del Monte Produce (FDP)—$2.1 billion
  • United Natural Foods (UNFI)—$2.0 billion
  • Core-Mark Holding Company (CORE)—$2.0 billion

Calavo Growers’ performance in fiscal 4Q15 and fiscal 2015

Calavo Growers (CVGW) reported fiscal 4Q15 net sales of $208.0 million, a rise of 3.6% when compared to net sales of $200.7 million in fiscal 4Q14. Sales in the Fresh Products segment fell by 1.7%, but sales in the Calavo Foods and RFG (Renaissance Food Group) segments rose by 7.0% and 12.0%, respectively, in fiscal 4Q15, as compared to sales in fiscal 4Q14. Calavo Growers’ gross profit margin rose by 5.4% in fiscal 4Q15, as compared to 4Q14.

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The company reported operating income of $8.7 million in fiscal 4Q15, as compared to operating income of -$2.5 million in fiscal 4Q14. Its net income and EPS (earnings per share) rose to $4.8 million and $0.28, respectively, in fiscal 4Q15, as compared to net income and EPS of -$1.2 million and -$0.08, respectively, in fiscal 4Q14.

On November 2, 2015, Calavo Growers declared an annual cash dividend of $0.80 per share on its common stock.

Fiscal 2015 results

In fiscal 2015, CVGW reported net sales of $856.8 million, a rise of 9.5% YoY (year-over-year). Sales in the Fresh Products, Calavo Foods, and RFG segments rose by 6.3%, 4.9%, and 16.5%, respectively, in fiscal 2015. The gross profit margin of Fresh Products fell by 2.6%, but the gross profit margins of Calavo Foods and RGF rose by 50.2% and 6.8%, respectively, in fiscal 2015.

Also, the company’s net income and EPS rose to $27.2 million and $1.57, respectively, in fiscal 2015, as compared to its net income and EPS of $0.1 million and $0.01, respectively, in fiscal 2014.

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Meanwhile, Calavo Growers’ cash and cash equivalents rose by 7.5%, and its inventories fell by 14.8%, in fiscal 2015. Its current ratio and debt-to-equity ratio fell to 1.19 and 0.53, respectively, in fiscal 2015, as compared to its current and debt-to-equity ratios of 1.21 and 0.58, respectively, in fiscal 2014.

Projections

The company has made the following projections and plans for fiscal 2016:

  • Double-digit gross margin increases are expected in the Fresh Products, RFG, and Calavo Foods segments.
  • New facilities in Jacksonville, Florida, and Jalisco, Mexico, will open early in 2016.
  • The company will expand its service capabilities and geographic reach.
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