MW Another avocado seller is downplaying tariffs - but is still monitoring this Trump policy

By Bill Peters

'We believe avocados, tomatoes and guacamole will remain a compelling value for consumers given their nutritional content and versatility,' Calavo Growers says

Calavo Growers Inc., a company that distributes avocados from Mexico and California, said Wednesday that it didn't expect any U.S. tariffs on imports from Mexico to have a "meaningful impact" on business, although it said they could add extra costs.

The company also downplayed the possibility of the government taking action over an internal inquiry related to its operations in Mexico, amid seemingly shifting priorities within the Trump administration.

"We believe avocados, tomatoes and guacamole will remain a compelling value for consumers given their nutritional content and versatility, and we expect strong demand to continue," Lee Cole, the company's chief executive, said in a statement.

"Looking ahead, we are confident in our ability to sustain the momentum we've created as we enter the peak California avocado season," he added.

Calavo Growers $(CVGW)$ sorts, packs and ripens avocados - as well as tomatoes and papayas - and makes and packages guacamole, according to its annual report, and delivers its products to grocery stores and distributors.

The company made the remarks about the tariffs in its fiscal first-quarter earnings release, and as executives try to adapt to President Donald Trump's on-again, off-again application of tariffs that have worried investors. Those tariffs, which tax imports, risk raising prices for consumers who have struggled to pay for more expensive essentials over the past three years. The tariffs on many Mexico imports have been halted until early April.

On Monday, Mission Produce Inc. $(AVO)$, an avocado grower, said it could draw from its production resources in Peru and California to work around any potential tariffs on Mexico. However, its outlook for its fiscal second quarter didn't include any impact from those possible duties on goods.

Calavo Growers reported fiscal first-quarter sales of $154.4 million, a 21% jump from the prior-year quarter. It reported adjusted earnings of 33 cents a share.

Cole, in a statement, also said the company continued to "monitor regulatory developments, including changes in FCPA enforcement priorities under the current administration," referring to the Foreign Corrupt Practices Act. Trump put that anti-bribery law on pause last month, saying it was "overexpansive" and put U.S. business at a disadvantage on the world stage.

Early last year, according to a filing, Calavo said after an internal review and an investigation by a board committee, that the committee "determined that certain of those matters related to the company's operations in Mexico raised potential issues" under the Foreign Corrupt Practices Act.

The company, in that filing, said it "voluntarily disclosed this ongoing investigation to the [Securities and Exchange Commission] and the [Department of Justice], and the company intends to fully cooperate with the SEC and the DOJ in connection with these matters."

In Wednesday's earnings release, the company said it continued to cooperate with those agencies, but that there were signs they currently planned on backing off.

"On February 18, 2025, the SEC notified us that activity in the investigation has been postponed after President Trump issued Executive Orders on February 10 and February 18, 2025," the company's release said.

It added: "We do not currently anticipate any near-term action from the government's FCPA inquiry that would likely have a material impact on our short-term financial outlook."

An SEC representative declined to comment.

Shares rose 2.9% after hours. Over the past 12 months, the stock has fallen around 26%.

-Bill Peters

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March 13, 2025 13:21 ET (17:21 GMT)

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