• Total Net Sales (Full Year 2024): $4.280 billion, a 1% decrease year-over-year.
• Gross Profit (Full Year 2024): $358 million, up 2% from the prior year.
• Gross Margin (Full Year 2024): Improved to 8.4% from 8.1% in 2023.
• Net Income (Full Year 2024): $142 million compared to a net loss of $11 million last year.
• Adjusted Net Income (Full Year 2024): $116 million, up from $102 million in the prior year.
• Diluted EPS (Full Year 2024): $2.96 per share compared to a loss of $0.24 per share last year.
• Adjusted Diluted EPS (Full Year 2024): $2.42 per share, up from $2.12 last year.
• Net Cash Provided by Operating Activities (Full Year 2024): $183 million, up from $178 million last year.
• Long-term Debt (End of 2024): Reduced to $244 million, a 39% reduction from $400 million at the end of 2023.
• Quarterly Dividend Increase: From $0.25 to $0.30 per share.
• Fresh and Value-Added Products Segment Sales (Full Year 2024): $2.607 billion, up from $2.478 billion last year.
• Banana Segment Sales (Full Year 2024): $1.476 billion, down from $1.638 billion last year.
• Other Products and Services Segment Sales (Full Year 2024): $197 million, down from $205 million last year.
• Capital Expenditures (Full Year 2024): $52 million, down from $58 million last year.

• Warning! GuruFocus has detected 4 Warning Sign with KOS.

Release Date: February 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Fresh Del Monte Produce Inc (NYSE:FDP) reported a 2% increase in gross profit to $358 million for the full year 2024, despite a slight decrease in total net sales.
• The company achieved a reduction in long-term debt, supported by strong cash flow, and increased its quarterly dividend for the third consecutive year.
• FDP's pineapple segment performed exceptionally well, with the launch of the Rubyglow pineapple and plans to expand production and sourcing operations.
• The fresh-cut facilities in North America saw improvements with more automation, enhancing efficiency and operational effectiveness.
• The company was honored with the SEAL Environment Initiative Award for surpassing emissions reduction targets, highlighting its commitment to sustainability.

Negative Points

• Total net sales for 2024 were 1% lower year-over-year, primarily due to lower sales in the banana segment and negative exchange rate impacts.
• The banana segment faced challenges with a decrease in net sales and gross profit due to competitive market pressures and weather-related supply issues.
• Higher production and procurement costs negatively impacted the company's gross profit, particularly in the banana segment.
• The company faced foreign exchange losses in 2024, contributing to a $3 million loss in other income expense net for the fourth quarter.
• Potential international tariffs on imports from key trade partners pose a risk to global trade dynamics, which could impact FDP's operations.

Q & A Highlights

Q: Can you provide more details on your core focus areas, particularly pineapples, fresh-cut fruit, and avocados? Are there any constraints due to weather, and how do you expect this to impact pricing and margins? A: (Mohammad Abu-Ghazaleh, CEO) We are expanding our pineapple plantations in Costa Rica and Brazil, with a new variety resistant to disease. We expect strong pricing for pineapples, similar to last year. For avocados, we are diversifying sourcing beyond Mexico to countries like Chile and Colombia. If tariffs are imposed on Mexican imports, costs may be passed to buyers, but it's too early to speculate on demand impact. (Monica Vicente, CFO) We are confident that pineapple pricing will remain strong.

Q: Regarding avocado sourcing, how do you plan to address quality concerns from regions outside Mexico and California? A: (Mohammad Abu-Ghazaleh, CEO) While Mexican and Californian avocados are perceived as high quality, avocados from Chile, Peru, and Colombia are equally good. We aim to diversify and increase volumes from these regions to reduce dependency on Mexico, though this will take time.

Q: With your banana production expanding in Somalia, how does this affect your strategy in Costa Rica and other regions? A: (Mohammad Abu-Ghazaleh, CEO) Bananas remain a core part of our business. We are expanding production in Brazil for local and European markets. Somalia will become a key supply source for the Middle East and Southern Europe, reducing transport times and potentially improving margins. This shift will take 18 to 24 months to fully realize.

Q: How do you plan to handle potential tariffs on imports from key trade partners, and what impact could this have on your business? A: (Mohammad Abu-Ghazaleh, CEO) We are expanding our global sourcing footprint for avocados, bananas, and pineapples. While we remain cautiously optimistic, we are prepared to adapt to any tariff developments. If tariffs are imposed, costs may be passed to buyers, but we are monitoring the situation closely.

Q: Can you provide an update on the Mann Packing operations and its impact on your financials? A: (Monica Vicente, CFO) We consolidated three facilities into one and sold certain assets of Fresh Leaf Farms for $18 million. We expect positive financial changes as the year progresses, reflecting these operational adjustments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.