FDP - Fresh Del Monte Produce stock dips on surprise sales decline

2023-05-03 06:33:53 ET

Fresh Del Monte Produce ( NYSE: FDP ) shares slid in premarket trading on Wednesday after reporting waning sales, a trend not anticipated by the two analysts covering the name.

The Florida-based fruit product provider posted a 1% sales decline year over year to $1.13B due to lower per unit selling prices of avocados as well as lower volumes in the fresh and value-added products segment. These factors counteracted strong banana sales and a hike in prices across most other products outside of avocados and led to the narrow dip in sales, disappointing against the consensus expectation of a 1.8% rise in sales as compared to 2022.

The company also reported $0.54 in adjusted diluted EPS for the quarter, below the $0.59 consensus estimate. Management cited “higher production and procurement costs across most product categories as well as higher ocean freight costs” as factors hampering better profitability.

“Our first quarter results of 2023 are a testament to our focus on profitability as we continue to commit to efficiency and optimization of resources. Our gross profit and margin were strong, which reflects our ongoing strategic efforts to further increase our profitability,” CEO Mohammad Abu-Ghazaleh commented. “During the quarter, as part of our asset optimization plan, we finalized the sale of three underutilized properties. We are laser-focused on being flexible and agile and on identifying market opportunities that will increase shareholder value.”

The company is due to provide its outlook during an earnings presentation at 10AM ET on Wednesday.

Shares of Fresh Del Monte ( FDP ) moved 2.03% lower shortly after the earnings announcement .

For further details see: