Why Agriculture Company Fresh Del Monte's Shares Are Falling Today

Fresh Del Monte Produce, Inc. FDP shares are trading lower after the company reported a third-quarter FY23 sales decline of 4.78% year-on-year to $1.003 billion, missing the consensus of $1.07 billion.

The net sales decline was primarily driven by lower sales volume in the fresh and value-added product segment and a decrease in sales in the other products and services segment due to softened global demand in our third-party ocean freight business. 

Fresh and Value-Added Products net sales were $574.0 million compared with $599.8 million in the prior-year period. 

Banana net sales were $384.7 million compared with $388.4 million in the prior-year period.

Adjusted EPS of $0.35 missed the analyst consensus of $0.42.

Gross profit for the third quarter of 2023 was $74.4 million compared with $88.0 million in the prior-year period.

Gross profit was impacted by lower sales volume, stronger Costa Rican colon and Mexican peso, and the inventory write-off and clean-up costs related to the flooding of a seasonal production facility in Greece due to heavy rainstorms, partially offset by lower distribution and ocean freight costs. 

Adjusted operating income was $34.3 million compared with $41.2 million in the prior-year period.

Adjusted FDP net income was $17.2 million compared with $25.9 million in the prior-year period.

The company exited the quarter with cash and equivalents worth $77.9 million.

The total long-term debt remained sequentially relatively flat at $401.0 million at the end of the third quarter of 2023 from $400.5 million at the end of the second quarter of 2023.

FDP declared a quarterly cash dividend of $0.20 per share, payable on December 8, 2023, to shareholders of record on November 15, 2023.

Price Action: FDP shares are trading lower by 9.96% at $22.51 on the last check Wednesday.