Inflation Affects Calavo Growers' Q3 Earnings; CEO Retires

Calavo Growers Inc CVGW reported third-quarter FY21 sales growth of 5.4% year-on-year, to $285 million, beating the analyst consensus of $281.67 million.
Fresh segment revenue remained flat Y/Y, and Renaissance Food Group (RFG) rose 14%, and Foods segments revenues increased 12% Y/Y.
The gross profit declined 74.4% Y/Y to $7.9 million, and the margin fell 8.6 percentage points Y/Y to 2.8%.
The company reported an operating loss of $(5.8) million in Q3 compared to a profit of $17.5 million in Q3 FY20.
The company held $1.3 million in cash and equivalents as of July 31, 2021.
Adjusted EBITDA of $1.0 million decreased 95.6% Y/Y.
Adjusted EPS of $(0.17) missed the analyst consensus of $0.05.
Calavo announced that James Gibson will retire as Chief Executive Officer, effective September 9, and Steven Hollister will assume the role of Interim CEO. In addition to his role of Interim CEO, Hollister will also serve as interim CFO.
"Our results for the third quarter of this year were adversely impacted by inflationary pressures on labor, raw materials and freight, all of which accelerated as the third quarter progressed," said incoming interim CEO Steven Hollister.
Price Action: CVGW shares closed lower by 1.71% at $47.26 on Wednesday.