Fresh Del Monte Produce Inc. revealed a decline in its first-quarter net sales and gross profit, largely due to decreased banana sales, compounded by service issues and competitive pressures in North America and Europe.
In the quarter ending March 29, 2024, net sales fell to $1,107.9 million from $1,128.5 million in the same period last year, while gross profit dropped to $82.3 million from $97.0 million.
The company’s financial performance reflects challenges including higher production costs and adverse exchange rate fluctuations, although some losses were mitigated by increased sales in its fresh and value-added products segment.
Mohammad Abu-Ghazaleh, Chairman and CEO of Fresh Del Monte, commented on the quarter’s results, emphasizing the growth in the fresh and value-added segment, which saw a 5% revenue increase.
This growth was credited to strategic initiatives focused on distribution, pricing, and premium product offerings.
Despite the setbacks in the banana segment, which saw a 5% drop in volume and lower pricing, the company managed to maintain strong cash flow, which supports its ongoing growth strategies, particularly in innovation around fresh-cut products and pineapples.
The financial details further highlight a mixed performance across different segments. The fresh and value-added products segment, which includes pineapples and avocados, experienced higher sales volumes and prices, contributing positively to the company’s gross profit.
Conversely, the banana segment’s revenue suffered significantly, dropping to $379.5 million from $425.1 million year-over-year, with gross profit halving to $21.8 million from $43.2 million, primarily due to lower sales and increased production costs.
Fresh Del Monte also reported on its operational achievements and future outlook. The company continues to focus on operational excellence and cost discipline while strategically allocating capital to enhance profitability across all business areas.
With its diverse product portfolio and strong brand recognition, Fresh Del Monte remains optimistic about its ability to generate long-term shareholder value despite current market challenges.
