FDP - Fresh Del Monte stock slides as profits pull back

Fresh Del monte Produce ( NYSE: FDP ) shares slid sharply on Wednesday after the company reported a significant drop in profits from the prior year.

The fruit and vegetable distributor notched $0.43 in earnings per share for the second quarter, well short of analyst consensus. Adjusted operating income was nearly halved from the prior year to $33.4M as compared to $60.6M in 2021.

“We continue to operate in one of the most volatile and uncertain macroeconomic environments in recent history,” CEO Mohammad Abu-Ghazaleh said. “As a result, the cost of product sold increased by $100M, driven by broad-based inflationary, supply chain, and logistical headwinds.”

The cost impacts more than offset a 6% jump in net sales and price increases that sought to counteract inflationary headwinds.

“Despite higher net sales, gross profit continued to be negatively impacted by multilayered cost pressures compared with the prior-year period,” the company explained. “Higher costs across the board including costs of packaging materials, fertilizers, ocean and inland freight, fuel and labor, offset our higher net sales."

Shares fell 4.26% shortly after Wednesday's market open.

Read more on headwinds hitting the company in relation to Russia's invasion of Ukraine .

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