Fresh Del Monte reports 2% increase in 4th quarter net sales

Fresh Del Monte Produce Inc. reported a $22.7 million increase, or 2%, in fourth quarter net sales for the fiscal year ending Dec. 30, 2022, compared with the prior-year period.

For the full fiscal year, net sales increased $190.3 million, or 4. Though increases in both periods were driven by inflation-justified price increases and partially offset by lower sales volume, primarily in banana and fresh and value-added products segments, the company sounded a positive note in its report.

“The fourth quarter of 2022 has been our best-performing fourth quarter in recent history, led by strong net sales and strong margins,” Mohammad Abu-Ghazaleh, Fresh Del Monte CEO and chairman, said in a news release. “Overall, we closed out 2022 in a much stronger position than 2021, driven by our commitment to remaining flexible and agile, controlling our costs, leveraging our assets, and optimizing customer relationships.”

The net sales increase was also countered by negative fluctuations in exchange rates.

Gross profit for the fourth quarter of 2022 was $81.7 million, compared with $39.8 million in the prior-year period. The increase stemmed from the higher per unit selling prices across all segments. The increase in selling prices partially offset continuing inflationary and other cost pressures, which resulted in higher per unit production and distribution costs, including packaging materials, fertilizers, inland and ocean freight, and labor and fuel.

For the full fiscal year 2022, gross profit was $340.2 million, compared with $303.8 million in the prior-year period. The company attributed the increase to higher gross profits in other products and services segment as a result of higher net sales of third-party ocean freight services, as well as the favorable impact of higher per unit sales prices across all segments.

Operating income for the fourth quarter of 2022 was $31.2 million, compared with the operating loss of $9.2 million in the prior-year period. For the full fiscal year 2022, operating income was $156.3 million, compared with $111.0 million in the prior-year period.

Equities researchers at StockNews.com downgraded Fresh Del Monte Produce from a buy rating to a hold rating in a research report released Feb. 24.