What Happened?
Shares of fresh produce company Calavo Growers (NASDAQ: CVGW) fell 4.8% in the afternoon session after the stock's weak momentum continued as the company announced its longtime CEO, Lee Cole, would retire. The company's longtime leader was set to step down on December 8 after decades of service. Board member and former Chief Financial Officer, John Lindeman, was appointed to take over as the new president and CEO. Lindeman was also set to continue to serve on the company's board of directors. The departure of a long-serving leader can create uncertainty for investors regarding a company's future direction, which likely contributed to the stock's decline.
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What Is The Market Telling Us
Calavo’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock dropped 17.3% on the news that the company reported weak first-quarter 2025 (fiscal Q2) results, which fell short of Wall Street's estimates across all key metrics, including sales, operating profit, and earnings per share. Top-line growth benefited from higher average avocado prices, which offset a year-on-year decline in volume. The volume decline was attributed to constrained supply out of Mexico and USDA inspection delays. Looking ahead, management expects volume growth to pick up, driven by new customer wins and expanded programs with existing accounts, as well as continued strength from the California avocado season. Overall, this quarter could have been better.
Calavo is down 17.7% since the beginning of the year, and at $20.99 per share, it is trading 25.5% below its 52-week high of $28.18 from April 2025. Investors who bought $1,000 worth of Calavo’s shares 5 years ago would now be looking at an investment worth $288.37.
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