Fresh produce company Fresh Del Monte (NYSE:FDP) reported revenue ahead of Wall Street’s expectations in Q3 CY2024, with sales up 1.6% year on year to $1.02 billion. Its non-GAAP profit of $0.77 per share was also 65.6% above analysts’ consensus estimates.

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Fresh Del Monte Produce (FDP) Q3 CY2024 Highlights:

• Revenue: $1.02 billion vs analyst estimates of $989.5 million (3% beat)

• Adjusted EPS: $0.77 vs analyst estimates of $0.47 (65.6% beat)

• EBITDA: $68.3 million vs analyst estimates of $55 million (24.2% beat)

• Gross Margin (GAAP): 9.3%, up from 8.3% in the same quarter last year

• Operating Margin: 5.3%, up from 3.3% in the same quarter last year

• EBITDA Margin: 6.7%, up from 5.7% in the same quarter last year

• Free Cash Flow Margin: 3%, similar to the same quarter last year

• Market Capitalization: $1.39 billion

"We are pleased to report strong performance in the third quarter. Our strategic focus on high-margin, value-added products continues to deliver positive results, demonstrating the strength of our product innovations and our commitment to driving long-term profitability and value for our shareholders,” said Fresh Del Monte Chairman and CEO Mohammad Abu-Ghazaleh.

Company Overview

Translating to "of the mountain" in Spanish, Fresh Del Monte (NYSE:FDP) is a leader in providing high-quality, sustainably grown fresh fruits and vegetables.

Perishable Food

The perishable food industry is diverse, encompassing large-scale producers and distributors to specialty and artisanal brands. These companies sell produce, dairy products, meats, and baked goods and have become integral to serving modern American consumers who prioritize freshness, quality, and nutritional value. Investing in perishable food stocks presents both opportunities and challenges. While the perishable nature of products can introduce risks related to supply chain management and shelf life, it also creates a constant demand driven by the necessity for fresh food. Companies that can efficiently manage inventory, distribution, and quality control are well-positioned to thrive in this competitive market. Navigating the perishable food industry requires adherence to strict food safety standards, regulations, and labeling requirements.

Sales Growth

A company’s long-term performance can indicate its business quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

Fresh Del Monte Produce carries some recognizable products but is a mid-sized consumer staples company. Its size could bring disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.