Fresh produce company Fresh Del Monte (NYSE: FDP) fell short of the markets revenue expectations in Q3 CY2025, with sales flat year on year at $1.02 billion. Its non-GAAP profit of $0.69 per share was 38% above analysts’ consensus estimates.
Is now the time to buy Fresh Del Monte Produce? Find out by accessing our full research report, it’s free for active Edge members.
Fresh Del Monte Produce (FDP) Q3 CY2025 Highlights:
- Revenue: $1.02 billion vs analyst estimates of $1.04 billion (flat year on year, 1.9% miss)
- Adjusted EPS: $0.69 vs analyst estimates of $0.50 (38% beat)
- Adjusted EBITDA: $58 million vs analyst estimates of $53.3 million (5.7% margin, 8.8% beat)
- Operating Margin: -2.1%, down from 4.5% in the same quarter last year
- Free Cash Flow Margin: 6%, up from 3% in the same quarter last year
- Market Capitalization: $1.65 billion
“We delivered another quarter of strategic progress, with overall net sales slightly higher and gross margin expanding in our fresh and value-added products segment. These results reflect the strength of our execution and our disciplined focus on higher-margin, value-added categories that continue to drive profitable growth,” said Mohammad Abu-Ghazaleh, Fresh Del Monte’s Chairman and CEO.
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.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $4.32 billion in revenue over the past 12 months, 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.
As you can see below, Fresh Del Monte Produce struggled to increase demand as its $4.32 billion of sales for the trailing 12 months was close to its revenue three years ago. This shows demand was soft, a tough starting point for our analysis.
This quarter, Fresh Del Monte Produce’s $1.02 billion of revenue was flat year on year, falling short of Wall Street’s estimates.
We also like to judge companies based on their projected revenue growth, but not enough Wall Street analysts cover the company for it to have reliable consensus estimates.
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Cash Is King
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Fresh Del Monte Produce has shown mediocre cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 3.6%, subpar for a consumer staples business.
Fresh Del Monte Produce’s free cash flow clocked in at $60.9 million in Q3, equivalent to a 6% margin. This result was good as its margin was 3 percentage points higher than in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, leading to temporary swings. Long-term trends carry greater meaning.
Key Takeaways from Fresh Del Monte Produce’s Q3 Results
We were also glad Fresh Del Monte's EPS outperformed Wall Street’s estimates. On the other hand, its gross margin missed and its revenue fell short of Wall Street’s estimates. Overall, we think this quarter would have been better. The stock traded down 9.9% to $31 immediately following the results.
Big picture, is Fresh Del Monte Produce a buy here and now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
