Fresh Del Monte Produce reported increased net sales in the second fiscal quarter, but gross profit and net income were hit in “one of the most volatile and uncertain macroeconomic environments in recent history.”
“We achieved strong net sales in the second quarter, marking the fifth consecutive quarter of net sales growth over prior year periods – demonstrating the resilience of our iconic brand. Our net sales increased by 70 million dollars, resulting from necessary pricing actions – driving growth across most product categories,” said Mohammad Abu-Ghazaleh, President and CEO.
“We continue to operate in one of the most volatile and uncertain macroeconomic environments in recent history. As a result, cost of goods sold increased by $100 million, driven by inflationary headwinds, large-scale supply chain and logistics.
“Despite these headwinds, we generated positive earnings, while maintaining our debt balance in line with last year, generating strong cash flow from operations and continuing to pay our dividends. “
He added that he trusts the dedication of the Fresh Del Monte Produce team to generate profitable sales.
“We plan to achieve this by focusing on our sustainable growth strategy and delivering on its key elements – organic expansion, product innovation, investment in technology, better customer relationships and sustainability,” he said. he declared.
Net sales benefited from inflation-justified price increases, the company said. This increase was partially offset by the negative impact of exchange rate fluctuations, mainly against the Japanese yen and the euro compared to the same period of the previous year.
The negative impact of exchange rate fluctuations was partially mitigated by our currency hedges.
Despite higher net sales, gross margin continued to be negatively impacted by multilevel cost pressures compared to the prior year period.
Higher costs across the board, including costs for packaging materials, fertilizer, ocean and inland freight, fuel and labor, offset our higher net sales.
Operating profit for the second quarter of 2022 was $34.3 million, compared to $59.3 million in the same period a year earlier. The decrease in operating profit was mainly due to lower gross profit, partially offset by lower administrative and advertising costs.