Fresh produce company Calavo Growers (NASDAQ: CVGW) reported Q4 CY2025 results topping the market’s revenue expectations, but sales fell by 20.8% year on year to $122.2 million. Its non-GAAP profit of $0.27 per share was 25.6% above analysts’ consensus estimates.
Is now the time to buy Calavo? Find out by accessing our full research report, it’s free.
Calavo (CVGW) Q4 CY2025 Highlights:
- Revenue: $122.2 million vs analyst estimates of $116.4 million (20.8% year-on-year decline, 5% beat)
- Adjusted EPS: $0.27 vs analyst estimates of $0.22 (25.6% beat)
- Adjusted EBITDA: $8.01 million vs analyst estimates of $7.45 million (6.6% margin, 7.5% beat)
- Operating Margin: -1.2%, down from 3.3% in the same quarter last year
- Market Capitalization: $449.7 million
“Across the first fiscal quarter, we saw sequential improvement in both our Fresh and Prepared segments,” said B. John Lindeman, President and Chief Executive Officer of Calavo.
Company Overview
A trailblazer in the avocado industry, Calavo Growers (NASDAQ: CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
With $616.3 million in revenue over the past 12 months, Calavo is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers.
As you can see below, Calavo’s revenue declined by 16.3% per year over the last three years, a tough starting point for our analysis.
This quarter, Calavo’s revenue fell by 20.8% year on year to $122.2 million but beat Wall Street’s estimates by 5%.
Looking ahead, sell-side analysts expect revenue to decline by 12.5% over the next 12 months. it’s tough to feel optimistic about a company facing demand difficulties.
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Cash Is King
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Calavo has shown mediocre cash profitability relative to peers over the last two years, giving the company fewer opportunities to return capital to shareholders. Its free cash flow margin averaged 3.1%, below what we’d expect for a consumer staples business.
Key Takeaways from Calavo’s Q4 Results
We were impressed by how significantly Calavo blew past analysts’ gross margin expectations this quarter. We were also glad its EBITDA outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock remained flat at $24.97 immediately after reporting.
So should you invest in Calavo right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
