Calavo Growers, Inc. reported its financial results for the fiscal third quarter and nine-month period ended July 31, 2025, on September 9, 2025. Total net sales for the third quarter were $178.8 million, a less than 1% decrease from $179.6 million in the prior-year quarter.
Gross profit for the third quarter was $18.2 million, or 10% of net sales, compared to $20.1 million in the same period last year. Fresh segment results were adversely affected by a temporary FDA detention hold on certain Mexican avocado imports, which incurred approximately $4.2 million in discrete costs. This issue was resolved by September 2, 2025.
Despite challenges in the Fresh segment, the Prepared segment delivered strong growth with higher volumes, with July sales annualizing to over $100 million. The company projects Prepared segment sales of approximately $115 million for fiscal 2026.
Net income from continuing operations for the quarter was $4.7 million, or $0.26 per diluted share, compared to $5.4 million, or $0.30 per diluted share, in Q3 2024. Adjusted net income increased to $10.2 million, or $0.57 per diluted share, from $10.0 million, or $0.56 per diluted share, in the prior year. Adjusted EBITDA also rose to $15.1 million from $12.9 million.
The company also achieved a legal milestone in August 2025, with a Federal Court in Mexico formally recognizing Calavo de Mexico as a maquila. This ruling is expected to strengthen the company's position to recover value-added tax (IVA) receivables and bolster its defense against a 2013 tax assessment, although the Mexican Tax Administration Service (SAT) has appealed this decision.
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