FDP - Fresh Del Monte shares slide despite promising inflation mitigation efforts

Fresh Del Monte Produce (NYSE:FDP) shares are sinking even after reporting “industry-leading” strategies to fight cost increases. The Cayman Islands-based produce company printed a beat on top and bottom lines for the first quarter on Wednesday, while bringing net sales back to pre-pandemic levels. CEO Mohammad Abu-Ghazaleh added that pricing actions minimized the impact on margins while vertical integration allows the company to beat the industry. Nonetheless, gross margin decreased to 6.6% compared with 8.3% in the prior-year period as inflationary pressures bore down on results. Abu-Ghazaleh explained that the metric was negatively impacted by “truly unprecedented” inflationary and cost pressures. Increases in “packaging material, fertilizer, ocean and inland freight, fuel and labor” were specifically cited as key components of ballooning costs. As a result, adjusted operating income fell $18 million year over year.  Additionally, the war in Ukraine was cited as removing two key markets for Ecuadorian bananas and

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Fresh Del Monte shares slide despite promising inflation mitigation efforts