Fresh produce company Fresh Del Monte (NYSE:FDP) fell short of the market’s revenue expectations in Q1 CY2025, with sales flat year on year at $1.10 billion. Its non-GAAP profit of $0.63 per share was 2.4% above analysts’ consensus estimates.
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Fresh Del Monte Produce (FDP) Q1 CY2025 Highlights:
- Revenue: $1.10 billion vs analyst estimates of $1.12 billion (flat year on year, 1.8% miss)
- Adjusted EPS: $0.63 vs analyst estimates of $0.62 (2.4% beat)
- Adjusted EBITDA: $61.3 million vs analyst estimates of $66.3 million (5.6% margin, 7.5% miss)
- Operating Margin: 4.1%, up from 2.7% in the same quarter last year
- Free Cash Flow Margin: 3.3%, up from 0.5% in the same quarter last year
- Market Capitalization: $1.66 billion
"We kicked off 2025 with continued momentum, building on the progress we made last year. In the first quarter, demand once again exceeded supply in our fresh and value-added products segment, highlighting the strength of our position in this key segment,” said Fresh Del Monte Chairman and CEO Mohammad Abu-Ghazaleh.
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.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $4.27 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 $4.27 billion of sales for the trailing 12 months was close to its revenue three years ago. This shows demand was soft, a rough starting point for our analysis.
This quarter, Fresh Del Monte Produce missed Wall Street’s estimates and reported a rather uninspiring 0.9% year-on-year revenue decline, generating $1.10 billion of revenue.
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
Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because 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 3.3%, subpar for a consumer staples business.
Taking a step back, we can see that Fresh Del Monte Produce failed to improve its margin over the last year. Its unexciting margin and trend likely have shareholders hoping for a change.
Fresh Del Monte Produce’s free cash flow clocked in at $36.1 million in Q1, equivalent to a 3.3% margin. This result was good as its margin was 2.7 percentage points higher than in the same quarter last year, but we wouldn’t put too much weight on the short term because investment needs can be seasonal, causing temporary swings. Long-term trends carry greater meaning.
Key Takeaways from Fresh Del Monte Produce’s Q1 Results
We struggled to find many positives in these results. Its EBITDA missed significantly and its gross margin fell short of Wall Street’s estimates. Overall, this was a softer quarter. Still, the stock traded up 1.4% to $35.30 immediately following the results.
So do we think Fresh Del Monte Produce is an attractive buy at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.