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Calavo Growers Earnings: Q2 Results Mixed as $32/Share Buyout Offer Surfaces

  • Writer: Hardik Shah
    Hardik Shah
  • Jun 12
  • 3 min read



Source: Calavo Growers site
Source: Calavo Growers site

TLDR

  • Acquisition offer on the table: Calavo received a non-binding proposal to buy the company at $32/share in a cash + stock deal.

  • Q2 earnings mixed: Revenue rose 3.3% YoY on strong avocado pricing, but volume and gross profit declined due to tomato weakness and short-term tariffs.

  • H2 outlook improving: Management sees a rebound in the Prepared segment and strength from the California avocado season to drive results in the back half.


Business Overview


Calavo Growers, Inc. (NASDAQ: CVGW) is a global leader in the procurement, packaging, and distribution of fresh avocados, tomatoes, and papayas. It also manufactures and sells prepared guacamole and other avocado products. The company operates two primary segments: Fresh (bulk produce) and Prepared (value-added products), servicing retail, foodservice, and club channels across the U.S. and internationally.


Calavo Growers Q2'25 Earnings:


  • Total net sales: $190.5M, up 3.3% YoY

  • Gross profit: $18.1M, down 11.9%

  • Net income from continuing operations: $6.9M or $0.38 per diluted share

  • Adjusted EBITDA: $11.4M, down from $13.8M YoY

  • SG&A expenses: $10.3M, down 21% due to lower headcount and professional fees

  • Dividend declared: $0.20/share payable July 30, 2025


Segment Breakdown:


  • Fresh Segment

    • Sales: $174.7M (+4.7%)

    • Gross profit: $14.1M (↓13.4%)

    • Margin pressures from lower avocado and tomato volumes


  • Prepared Segment

    • Sales: $15.9M (↓9.9%)

    • Gross profit: $4.0M (↓6.3%)


“Gross profit per avocado carton improved year-over-year, reflecting our disciplined pricing strategy and strong supply chain execution.” — Lee Cole, CEO

Forward Guidance


Management expects a stronger second half of 2025, especially in the Prepared segment due to:

  • New customer acquisitions

  • Expansion of programs with existing clients

  • Continued strength in the California avocado season

“We anticipate strong momentum in our Prepared segment during the second half of the year... beginning in the third quarter.” — Lee Cole, CEO

Operational Performance


  • Fresh volume fell 16%, but pricing surged 40.6%, cushioning top-line results

  • Tomato sales and margin sharply impacted by weather-related demand softness and oversupply

  • Tariffs from a three-day USMCA-related disruption cost $0.9M and negatively impacted gross profit

“Cold weather in February and trade policy uncertainty in March further affected demand patterns.” — Lee Cole, CEO

Market Insights


  • U.S. tomato market faced oversupply and weather-induced demand weakness

  • Avocado pricing supported by tight supply from Mexico and USDA inspection delays

  • Prepared segment impacted by lower input volume and higher fruit costs


Strategic Initiatives


  • Cost controls: SG&A reduced by over 20% YoY

  • Margin discipline: Focus on per-carton profitability, even at the expense of volume

  • Prepared segment rebuild: Investments in customer acquisition expected to pay off in H2

  • Brand and reach expansion: Leveraging California season to broaden footprint


Capital Allocation


  • Dividend: Maintained at $0.20/share

  • Strong liquidity:

    • $60.4M in cash

    • $119.8M in total available liquidity

    • No borrowings on credit line

    • Total debt: $4.7M



Relative Performance vs. Mission Produce

Compared to Mission Produce (AVO), which posted record Q2 revenue but saw margin pressures, Calavo's quarter leaned on margin resilience and disciplined cost control. Where Mission remains a pure-play avocado exporter, Calavo’s diversified portfolio (Prepared foods, tomatoes) introduces both risk and upside. Notably, Calavo faces more acute exposure to tomato market volatility, while Mission is more exposed to FX and geographic concentration.


📖 Read the Mission Produce earnings article:Mission Produce Earnings: Record Q2 Revenue Despite Margin Pressures


M&A Watch: Acquisition Proposal Emerges at $32/Share


Just days after reporting Q2 earnings, Calavo Growers announced it has received a non-binding acquisition proposal to purchase all outstanding shares at a nominal value of $32.00 per share, consisting of a mix of cash and stock.


The offer remains preliminary and subject to due diligence and financing, with no guarantee that it will proceed. Calavo’s Board of Directors is actively reviewing the proposal in consultation with legal and financial advisors.


At the time of announcement, Calavo shares traded below the offer price, potentially signaling market skepticism about the deal’s certainty or valuation structure.

This proposal could mark a pivotal shift in Calavo’s strategic direction—especially as the company navigates margin volatility, sector consolidation, and global supply chain headwinds.


The Bottom Line


Calavo continues to show pricing resilience and strong cash discipline in a turbulent operating environment. With a promising H2 setup for its Prepared segment and the strength of California avocado season, the company is positioned for a more balanced growth path. Watch for recovery in volume trends, margins in Prepared foods, and any recurrence of disruptive tariffs.


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