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SANTA PAULA, Calif. - Calavo Growers, Inc. (NASDAQ:CVGW), a prominent player in the avocado and fresh food industry with a market capitalization of $423 million, has initiated a share repurchase program, with plans to buy back up to $25 million of its outstanding common stock. According to InvestingPro analysis, the company’s stock currently shows potential upside based on its Fair Value assessment. The company’s Board of Directors has given the green light for the program, which is set to run until March 18, 2027, unless it is concluded or extended before that date by the Board.
Lee Cole, President and CEO of Calavo, expressed the company’s confidence in its long-term strategy and financial health, noting that the buyback program reflects a commitment to enhancing shareholder value. He emphasized that the initiative aligns with Calavo’s strong balance sheet, anticipated cash flow, and robust liquidity, while still allowing the company to invest in strategic growth and operational improvements. InvestingPro data confirms this financial strength, showing the company holds more cash than debt and has maintained dividend payments for 24 consecutive years.
The repurchase of shares may be executed through various methods, including open-market transactions, private negotiations, or Rule 10b5-1 trading plans, all within the bounds of federal securities laws and regulations. The specific details of the repurchases, such as timing, volume, and price, will be subject to market conditions and will be determined by company management under the Board’s oversight.
Founded in 1924 and headquartered in Santa Paula, California, Calavo Growers operates a vertically integrated business model. It processes and distributes avocados, tomatoes, papayas, and guacamole, catering to a wide range of customers, including retail grocery, foodservice, club stores, and food distributors across the U.S. and Mexico. The company generates annual revenue of $688 million and maintains a "GOOD" financial health rating according to InvestingPro’s comprehensive analysis, which includes over 30 additional financial metrics and insights available to subscribers.
The announcement of the share repurchase program is based on a press release statement and is considered a forward-looking statement. As such, it is subject to various risks and uncertainties that could cause actual outcomes to differ materially from those projected. For a detailed discussion of these risks, stakeholders are encouraged to consult Calavo’s most recent filings with the Securities and Exchange Commission, including its Form 10-K and Form 10-Q.
In other recent news, Calavo Growers reported first-quarter earnings that exceeded analyst expectations, although its revenue fell short of projections. The company announced adjusted earnings per share of $0.33, surpassing the analyst consensus of $0.30. However, revenue was reported at $154.4 million, which was below the anticipated $159.85 million, despite a 21% year-over-year increase. The Fresh segment, which includes avocados and tomatoes, contributed significantly to this performance with sales rising 23.7% to $139.9 million. This increase was largely driven by a 30.5% rise in the average price per carton, which compensated for a 4.6% decrease in volume. Gross profit for the quarter increased by 46.2% to $15.7 million, with the Fresh segment’s gross profit jumping 88.8% to $12.1 million. The company also achieved a 23.6% reduction in selling, general, and administrative expenses, totaling $10.3 million. Calavo Growers ended the quarter with a robust balance sheet, holding $48.5 million in cash and cash equivalents and $96.7 million in available liquidity.
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