- Strong Financial Performance - Net sales increased 4% to $1.183 billion, driven by higher selling prices and favorable exchange rates.
- Profit Growth - Net income rose to $57 million, with adjusted FDP net income reaching $59 million, up from $51 million last year.
- Production Expansion - Costa Rica expansion expected to grow at a rate slightly higher than mid-single digits, with plans to increase acreage for Pinkglow pineapples.
- Disease Impact - Black Sigatoka disease caused a 20% decline in banana export volume from Costa Rica, impacting supply.
- Supply Constraints - Pinkglow pineapple demand remains high, but supply is constrained; additional supplies expected by end of '26 or early '27.
Segment Performance
The fresh and value-added products segment saw a 4% increase in net sales, driven by higher per unit selling prices in the pineapple product line. According to Mohammad Abu-Ghazaleh, "Demand for our pineapple portfolio remains strong, driven by trusted brands like Honeyglow and Pinkglow." The company launched Pinkglow in the United Arab Emirates, marking its first sustained market entry for the variety in the Middle East.
Outlook and Guidance
For the full year 2025, Fresh Del Monte expects net sales growth of 2% year-over-year. Gross margin is expected to be in the range of 10% to 11% for the fresh and value-added products segment. The company expects CapEx to be in the range of $70 million to $80 million, down from $80 million to $90 million previously communicated. Mohammad Abu-Ghazaleh noted that the company expects a shortage of pineapple supply to continue into 2026, driven by strong demand for premium varieties.
Valuation and Metrics
With a P/E Ratio of 11.99, P/B Ratio of 0.87, and P/S Ratio of 0.42, the stock appears to be reasonably valued. The EV/EBITDA ratio of 7.83 suggests that the company's enterprise value is relatively in line with its earnings before interest, taxes, depreciation, and amortization. The Dividend Yield of 2.93% and Free Cash Flow Yield of 8.07% are also attractive. Analysts estimate next year's revenue growth at 2.7%, which is slightly higher than the company's guidance.
Operational Highlights
The company is seeing strong demand for fresh-cut fruit, particularly in retail and convenience stores, across various regions. Margins for fresh-cut fruit are expected to remain stable, with a focus on introducing new products and SKUs. The company is also working on TR4 resistant gene additive banana lines, with field testing expected to begin in the coming months. Additionally, the company is transitioning from using older vessels to container ships, particularly for the Asian market.