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January 17, 2026 • 4 min read
The avocado business is notoriously volatile, subject to the whims of weather, border politics, and fluctuating harvest yields. For Calavo Growers Inc. (CVGW), a global leader in the avocado and prepared food industry, fiscal 2025 proved to be a year of stabilization and strategic pivoting. With their latest Annual Report on Form 10-K just released, we have the opportunity to dig into the income statement to see how the company performed ahead of its recently announced plans to merge with rival Mission Produce.
Calavo operates in a highly competitive agricultural sector, sourcing, packing, and distributing avocados, tomatoes, and papayas, while also manufacturing prepared products like guacamole. Let’s unpack the numbers to see where the profit actually lies.
For the fiscal year ended October 31, 2025, Calavo reported Total Revenue of $648.4 million. This represents a slight decline of roughly 2% compared to the previous year. While a revenue dip might initially raise eyebrows, context is crucial: the company has been streamlining operations, including the divestiture of its "Fresh Cut Business" (formerly Renaissance Food Group) in August 2024 to focus on its core profitable segments.
Below is a visualization of how that top-line revenue filters down through costs and expenses to the bottom line:
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Despite the slight revenue contraction, Calavo posted Net Income of $20.0 million, or $1.11 per diluted share. This is a significant improvement compared to the prior year's net loss, signaling that the company's efforts to shed less profitable weight are bearing fruit.
Calavo reports through two primary segments, and the disparity in their margin profiles offers great insight into the business model.
1. The Fresh Segment (Volume) This division is the company's backbone, handling fresh avocados, tomatoes, and papayas. It generated $576.5 million in revenue, accounting for roughly 89% of total sales. However, fresh produce is a low-margin volume game. The segment reported a Gross Profit of $46.3 million, resulting in a gross margin of approximately 8.0%.
The Fresh segment faced specific headwinds in 2025, including a $5.1 million hit related to discrete costs from an FDA detention hold on certain Mexican avocado imports. Furthermore, tomato sales saw a meaningful decline due to smaller crops and pricing pressures.
2. The Prepared Segment (Value) While much smaller, the Prepared segment (guacamole and avocado pulp) is far more efficient at generating profit per dollar of sales. With revenue of $71.9 million, it contributed $17.4 million in Gross Profit. This translates to a Gross Margin of 24.1%—triple the margin of the fresh fruit business. This segment benefited from lower fruit input costs and operational efficiencies, highlighting why value-added processing is so critical for agricultural companies trying to smooth out commodity price volatility.
Operating expenses, primarily Selling, General, and Administrative (SG&A), came in at $44.1 million. It is worth noting that Calavo runs a relatively lean operation, with an Operating Margin of 3.0%.
However, the filing highlights persistent risks inherent to international agriculture. Beyond the FDA detention issues mentioned earlier, Calavo continues to navigate complex tax environments. The income statement reflects $2.0 million in expenses specifically related to Mexican tax matters. The company is currently engaged in disputes with the Mexican tax authority (SAT) regarding Value Added Tax (IVA) refunds and a 2013 tax assessment, a reminder that regulatory navigation is as much a part of the business as farming.
Calavo is at an inflection point. The financials show a company that has successfully stabilized its bottom line by focusing on its core strengths—sourcing and processing avocados—while shedding the distraction of the Fresh Cut business.
The backdrop to this 10-K is the looming merger with Mission Produce, another giant in the avocado space. In an industry where competitors range from small independent packers to global conglomerates, consolidation is often the answer to combating supply chain inflation and gaining pricing power.
For investors, this filing paints a picture of a company that has cleaned up its balance sheet and restored profitability just in time for a transformational corporate event. While the margins in fresh produce remain razor-thin, the robust performance of the Prepared segment and the return to positive net income suggest Calavo is entering its next chapter on solid footing.
Last updated: January 17, 2026