Fresh Del Monte Produce has recently released its 10-Q report, providing an in-depth look at the company's financial condition and results of operations. Fresh Del Monte Produce Inc. is a leading producer, marketer, and distributor of fresh and fresh-cut fruits and vegetables, as well as prepared fruit and vegetables, juices, beverages, and snacks. The company operates globally under the Del Monte brand and other regional brands, serving various markets including North America, Europe, the Middle East, Asia, and Africa.
The report details the company's performance in the second quarter of 2024, revealing a net sales figure of $1,139.7 million, a decrease from $1,180.5 million in the same period of 2023. For the first six months of 2024, net sales amounted to $2,247.5 million, down from $2,309.0 million in the first six months of 2023. The decrease in net sales was primarily attributed to lower banana net sales, driven by reduced sales volume and per unit selling prices, partially offset by increased net sales in the fresh and value-added product segment due to higher pricing.
Gross profit for the second quarter of 2024 was $113.2 million, compared with $116.8 million in the second quarter of 2023. For the first six months of 2024, gross profit amounted to $195.4 million, down from $213.8 million in the first six months of 2023. The decrease in gross profit was impacted by lower net sales, higher per unit production and procurement costs, and other product-related charges, including clean-up costs associated with a seasonal production facility in Greece and severance charges from the outsourcing of certain functions.
Selling, general and administrative expenses for the second quarter of 2024 increased by $3.1 million, or 7%, compared with the second quarter of 2023, and increased by $6.1 million, or 6%, in the first six months of 2024 compared with the first six months of 2023. The increase was primarily due to higher employee benefit and professional fees, as well as higher payroll, marketing, and promotional activities.
The report also highlights the company's response to inflationary and cost pressures, including price increases on the majority of its products and contractually indexed fuel and freight surcharges. Fresh Del Monte Produce has also been impacted by economic disruptions, such as the invasion of Ukraine by Russia and recent shipping disruptions in the Red Sea and surrounding waterways, which have created logistical pressures and increased shipping times.
Furthermore, the report discusses the company's optimization program, which involved the sale of non-strategic and underutilized assets, generating cash proceeds of approximately $156.4 million. Additionally, Fresh Del Monte Produce is exploring strategic alternatives for its Mann Packing operation and is actively contesting income tax deficiencies issued by taxing authorities in two foreign jurisdictions.
The 10-Q report provides investors and stakeholders with a comprehensive overview of Fresh Del Monte Produce's financial performance, challenges, and strategic initiatives, offering valuable insights into the company's operations and future outlook. Today the company's shares have moved 11.1% to a price of $27.35. Check out the company's full 10-Q submission here.
