Based on the provided financial report, the title of the article is: "Fresh Del Monte Produce Inc. Reports Quarterly Results for the Period Ended March 28, 2025

Fresh Del Monte Produce Inc. Reports First Quarter 2025 Results

Fresh Del Monte Produce Inc., one of the world’s leading producers and distributors of fresh and fresh-cut fruits and vegetables, has reported its financial results for the first quarter of 2025. The company’s performance during this period provides insights into the current state of the produce industry and the challenges it faces.

Overview of Financial Performance

For the first quarter of 2025, Fresh Del Monte reported net sales of $1,098.4 million, a slight decrease from the $1,107.9 million reported in the same period of 2024. Despite the lower sales, the company was able to increase its gross profit to $92.2 million, up from $82.3 million in the prior-year quarter. This improvement in gross profit was primarily driven by higher selling prices in the company’s fresh and value-added products segment, which offset higher production, procurement, and distribution costs.

Operating income for the quarter increased to $44.9 million, compared to $44.1 million in the first quarter of 2024. This increase was due to the higher gross profit, partially offset by a lower gain on the disposal of property, plant, and equipment compared to the prior-year period.

Segment Performance

Fresh Del Monte’s business is divided into three main segments: fresh and value-added products, banana, and other products and services.

Fresh and Value-Added Products The fresh and value-added products segment, which includes items such as pineapples, fresh-cut fruits and vegetables, melons, and prepared foods, reported net sales of $683.2 million in the first quarter of 2025, up from $676.8 million in the same period of 2024. This increase was primarily due to higher selling prices for avocados and stronger demand for fresh-cut fruits in North America, partially offset by lower sales of fresh-cut vegetables and vegetables.

Gross profit for the fresh and value-added products segment increased to $69.3 million, compared to $55.9 million in the prior-year quarter. This improvement was driven by higher selling prices for pineapples and melons, although it was partially offset by higher production, procurement, and distribution costs.

Banana The banana segment reported net sales of $363.8 million in the first quarter of 2025, down from $379.5 million in the same period of 2024. This decrease was primarily due to lower sales volume and selling prices in Asia, as well as lower sales volume in North America due to weather-related logistics disruptions. The negative impact of exchange rate fluctuations, such as a weaker Euro and Korean won, also contributed to the decline in net sales.

Gross profit for the banana segment decreased to $16.8 million, compared to $21.8 million in the prior-year quarter. This decline was mainly driven by the lower net sales and higher production and procurement costs.

Other Products and Services The other products and services segment, which includes the company’s third-party freight and logistics services, as well as its Jordanian poultry and meats business and biomass initiatives, reported net sales of $51.4 million, in line with the $51.6 million reported in the first quarter of 2024. Gross profit for this segment increased to $6.1 million, up from $4.6 million in the prior-year quarter, primarily due to higher selling prices in the poultry and meats business.

Macroeconomic Factors and Challenges

Fresh Del Monte’s performance was impacted by several macroeconomic factors during the first quarter of 2025. The company continues to monitor the ongoing conflicts in the Middle East, which have created logistical pressures and disruptions in shipping routes, negatively affecting the company’s operations.

Additionally, the U.S. government’s implementation of new tariffs on imports from various countries, including those from which Fresh Del Monte sources its products, has significantly increased the company’s cost of goods sold. While the company has been able to exempt certain products sourced from Mexico under the United States-Mexico-Canada (USMCA) trade agreement, the overall impact of the tariffs is expected to be material for the remainder of 2025. The company has begun notifying its North American customers of upcoming price increases to address these increased costs.

Fresh Del Monte is also facing ongoing challenges related to income tax adjustments proposed by foreign taxing authorities. The company is vigorously contesting these adjustments and intends to exhaust all administrative and judicial remedies to resolve the matters, which could be a lengthy process.

Liquidity and Capital Resources

As of March 28, 2025, Fresh Del Monte had $34.4 million in cash and cash equivalents, as well as $551 million in available borrowing capacity under its $750 million senior unsecured revolving credit facility. The company generated $46.1 million in net cash from operating activities during the first quarter of 2025, an increase of $27.4 million compared to the same period in 2024.

Fresh Del Monte’s Board of Directors recently approved a $150 million stock repurchase program, under which the company repurchased 253,850 shares for $7.6 million during the first quarter of 2025. The company also paid $14.4 million in dividends during the quarter.

Outlook and Future Considerations

Fresh Del Monte’s performance in the first quarter of 2025 was mixed, with the company’s fresh and value-added products segment showing strength, while the banana segment faced challenges. The company’s ability to navigate the ongoing macroeconomic and geopolitical pressures, as well as its success in passing on increased costs to customers, will be crucial for its future performance.

The company’s liquidity position remains strong, with ample access to cash and credit facilities to fund its operations and strategic initiatives. However, the company’s long-term liquidity and ability to meet its debt covenants are dependent on various factors, including the continued impact of the current economic environment and the resolution of the ongoing tax disputes.

Looking ahead, Fresh Del Monte will need to closely monitor the evolving trade landscape, including the potential impact of any additional tariffs or trade restrictions, and continue to implement strategies to mitigate the effects on its business. The company’s ability to adapt to changing consumer preferences, optimize its operations, and capitalize on growth opportunities in its fresh and value-added products segment will also be critical to its future success.

Overall, Fresh Del Monte’s first-quarter performance demonstrates the company’s resilience in the face of challenging market conditions. However, the company will need to navigate the ongoing macroeconomic and industry-specific headwinds to maintain its position as a leading player in the global produce market.