Fresh Del Monte Produce Inc. Stock

Good day, everyone, and welcome to Del Monte Corporation's Second Quarter 2026 Conference Call. Today's conference call is being broadcast live over the Internet and is also being recorded for playback purposes. [Operator Instructions] Thank you. For opening remarks and introductions, I would like to turn today's call over to the Vice President, Investor Relations with Del Monte Corporation, Ms. Christine Cannella. Please go ahead, Ms. Cannella.

Thank you, Rob. Good day, everyone, and thank you for joining our second quarter 2026 conference call. Joining me in today's presentation of results are Mr. Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer; and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer. I hope that you had a chance to review the press release that was issued earlier via Business Wire. You may also visit the company's IR website at investorrelations.freshdelmonte.com to access today's earnings materials and to register for future distributions. This conference call is being webcast live on our website and will be available for replay after this call.

Please note that our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website. I would like to remind you that much of the information we will be speaking to today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the federal securities laws. In today's press release and our SEC filings, we detail risks that may cause our future results to differ materially from these forward-looking statements. Our statements are as of today, July 29, 2026, and we have no obligation to update any forward-looking statement we may make.

During the call, we will provide a business update along with an overview of our financial results, followed by a question-and-answer session. With that, I will turn today's call over to Mr. Mohammad Abu-Ghazaleh. Please go ahead.

Thank you, Christine. Good morning, everyone, and thank you for joining us. This quarter marks a defining milestone in our company's history. We officially stand as Del Monte Corporation, a premier organization built on decades of world-class leadership in fresh produce, now fully empowered to create exceptional value across fresh, refrigerated, shelf-stable and prepared foods while unlocking the complete potential of our global agricultural platform. That strategic evolution is already delivering clear tangible results. Our Foods division created through the purchase of Del Monte Foods rapidly validated our thesis following the acquisition in March. where we move with speed and precision to execute a clear value creation plan built on operational discipline, targeted product focus, sharpened commercial execution and supply chain rigor across our expanded global distribution network. By the end of the second quarter, I'm proud to announce that our Foods division delivered profitable performance, establishing a strong operational foundation that represents just the beginning of the growth trajectory we have mapped out as we expand our branded platform. What we are building is a fundamentally stronger, more dynamic company designed to deliver enhanced earnings quality, continuous resilience and long-term valuation expansion.

For decades, Fresh has been the foundation of our success, and it remains the core of our business. Our fresh platform delivers massive global scale supply chain expertise and deep retail relationships worldwide, driving our volume, powering operational leverage and anchoring our global market presence. By pairing our fresh strength with our expanded Prepared Foods portfolio, which includes the acquisition of Del Monte Foods, we now operate 2 distinct highly complementary growth engines.

Our shelf-stable prepared foods category bring structurally higher margins, extended shelf life and predictable revenue streams backed by incredible consumer loyalty to the Del Monte brand. Put simply, we have evolved into a fully diversified global food platform that balances the reach and momentum of fresh with the margin quality and brand equity of packaged foods, positioning us to navigate market cycles more smoothly and deliver consistent long-term shareholder value. Equally transformative is how this acquisition unlocks the full strategic potential of the Del Monte brand.

For nearly 4 decades, Brand ownership was divided across separate platform. But now for the first time since the 1980s, the Del Monte brand is under single unified leadership. We now directly control the global brand strategy, the innovation road map and category expansion decisions, creating a major structural competitive advantage. This unified ownership empowers us to expand retail partnerships through cross-selling across fresh, refrigerated and pantry categories, streamlined procurement and logistics under one integrated supply chain and leverage shared consumer insights to extend the brand into high-growth modern consumption occasions.

As we execute our multiyear integration plan, our operational priorities for the remainder of 2026 remain clear and focused. First, we will drive operational rigor across our Food division by maintaining outstanding service levels, deepening customer partnerships and executing a high-performing pack season.

Second, we will capture clear line of sight synergies through early cost efficiencies across procurement, logistics, SG&A and trade spend optimization. Third, we will continue investing in and growing our Fresh division, which remains our primary engine for overall revenue and operational cash flow. The performance of our first 100 days since acquiring Del Monte Foods confirms the strength of our strategy and the best opportunities ahead.

Owning the Del Monte brand outright and leveraging our combined agricultural platform enables us to capture growth in areas this company has never reached before. I am remarkably confident in what we are building. And I believe that Del Monte Corporation of the coming decade will be a stronger, higher margin and significantly more valuable business. With that, I will turn it over to Monica Vicente, our Chief Financial Officer, to discuss our financial results. Monica?

Thank you, Mr. Abu-Ghazaleh, and good morning, everyone. Before I review our second quarter results, I want to address the 3 key strategic initiatives that we believe will support our future growth and performance. We maximized our expanded production portfolio following our first full quarter of Del Monte Foods ownership. We strengthened our liquidity through our expanded revolving credit facility, and we are actively optimizing our global agricultural and production network. Each of these actions reinforces our core priorities, strengthening operational efficiency, maximizing cash generation and elevating long-term shareholder value.

Starting with our transformation and growth initiatives. The second quarter marked a successful first full quarter of Del Monte Foods ownership. Integration is moving swiftly and delivering ahead of our expectations. We acted decisively to capture operational efficiencies and early performance supports our expectations for long-term value creation from this combination. Reflecting this momentum, we are raising our 2026 outlook for Del Monte Foods. We now expect net sales of $625 million, up from $600 million and adjusted EBITDA of $35 million, up from $23 million. We believe this reflects the underlying strength, margin quality and value creation of our expanded business. During the quarter, we initiated target pricing actions, product portfolio enhancements and trade spend optimizations.

Together, these high-return focus areas are expected to generate approximately $9 million in annual margin expansion as they phase in across '26 and 2027. Looking forward, our focus remains in completing a seamless integration, driving procurement and logistics efficiencies and scaling our combined commercial execution. To support our expanded commercial scale and seasonal opportunities, we fortified our financial flexibility. Earlier this month, we expanded the capacity in our revolving credit facility from $750 million to $900 million, maintaining our favorable terms from -- through February of 2029 with the full support of our lending partners.

We believe this enhances our liquidity position as working capital normalizes across seasonal harvest cycles and supports future cash conversion. Across our fresh core operations, we are proactively taking decisive return on capital actions to build an agile, cost-effective production network. In Costa Rica, strategic adjustments to our production footprint are expected to support long-term cost efficiencies.

By optimizing our agricultural footprint, we are repurposing high-value land to scale our premium Del Monte Gold and Honeyglow pineapple production. This directly aligns with strong global demand for our high-margin premium fresh offerings and positions us to pursue accelerated profitable growth into the future.

Turning to our overall financial performance for the quarter. Net sales reached $1.22 billion, up 3% year-over-year, driven by our strategic expansion into prepared categories. On an adjusted basis, net sales rose 9%. Gross profit reached $121 million, yielding a solid 9.9% gross margin despite inflationary headwinds.

Adjusted operating income was $49 million, adjusted net income reached $34 million and adjusted diluted EPS was $0.72. Adjusted EBITDA was a strong $72 million with a 6% margin, underscoring the resilience and earnings quality of our diversified enterprise model. Looking holistically at our combined total fresh operations, comprising our fresh and value-added products and banana segments, demand across our flagship offerings, particularly our proprietary pineapples remains robust.

High per unit realizations across major international markets demonstrate the enduring strength of our brand and customer preference for our premium fresh portfolio. Our primary operational focus for our fresh business is centered on 3 strategies. First is supply and logistics optimization, realigning production networks to maximize throughput, control domestic and ocean logistics and drive margin improvement. Second is high-margin focus, prioritizing capital towards our highest returning fresh premium offerings like the Del Monte Gold and Honeyglow and maximizing yield consistency. And third is pricing and sourcing agility, expanding our global sourcing flexibility to capture favorable market pricing while maintaining delivery reliability for our retail partners worldwide.

Moving on to capital allocation and outlook. Our disciplined capital allocation framework continues to deliver balanced growth and direct return of capital to shareholders. Our operating cash flow reached $94 million for the first half of 2026. Our full year capital expenditure expectations are set between $85 million and $95 million, focused directly on expansion projects in Central America, fresh-cut growth in Europe, investments in the Del Monte Foods business and technology investments.

Our Board has declared a quarterly cash dividend of $0.30 per share, $1.20 annualized. And additionally, we repurchased $16 million in common stock during the quarter, reflecting our ongoing commitment to enhancing shareholder value. Looking at our full year 2026 outlook. We expect adjusted net sales growth of 13% to 15%.

Furthermore, favorable shifts in macro environmental cost factors are providing positive momentum. We now anticipate external cost pressures to moderate significantly to $45 million to $55 million, down from prior estimates of $60 million to $70 million, benefiting our production, ocean freight, logistics and distribution cost profile.

Full year gross margin expectations across our integrated business model remain firm, supported by expanding trade efficiency and strategic sourcing flexibility. For our fresh and value-added segment, our target margins are 11% to 12%. For banana --

Ladies and gentlemen, we are experiencing some technical difficulties with the conference call. Please stay on the line. We will resume momentarily.

For our full year gross margin expectations across our integrated business model remained firm, supported by expanding trade efficiency and strategic sourcing flexibility. For our fresh and value-added segment, our target margins are 11% to 12%. For bananas, target margins are 3% to 4% as footprint adjustments take effect. For the Prepared Products segment, the target margins are 14% to 15%. And for other products and services, our target margins are 10% to 11%. As far as adjusted EBITDA, we are targeting between $230 million and $240 million.

In summary, we believe our business model is stronger, more diversified and better positioned to enhance cash conversion. Our priorities are clear: capture integration efficiencies, optimize our global supply network, reduce leverage as working capital normalizes and drive disciplined shareholder return. That concludes my remarks. Operator, we're ready to begin Q&A.

[Operator Instructions] Your first question comes from the line of Mitch Pinheiro from Sturdivant & Co.

Can you hear me?

Yes, Mitch. Sorry for the -- some technical issue.

That's okay. That caught me off guard. So thanks for the updated guidance, the detailed guidance. That was very helpful. Let me ask -- so good news on the Del Monte Foods. You're sort of raising your guidance or you are raising your guidance on sales and your adjusted EBITDA outlook. What is it in that first 100 days? Can you just maybe give us some examples as to what you're seeing, what you've been able to accomplish and maybe where in the next 6 months for the remainder of this year, what you hope to achieve in that segment?

Well, when we acquired the assets and the Del Monte Food company, there were many issues that they were facing. One of them was service levels, other was shortage of volumes to customers. And our management has addressed this, I mean, together with the food management, which is the core, of course, players in this game, but what our management guidance, we have reached service levels, which could be the maximum in any food service environment, 95% and above delivery on time as well as delivering volumes when the volumes are needed, which is very, very important in this business, of course, as you know. And rationalizing our product lines, the SKUs, focusing now on the -- we are in the middle of the harvest and packing season for the green beans, corn and other products. So this is going full speed and scale.

Distribution and logistics have been rationalize and still will be going rationalization, especially storage and warehousing, which is a very important part of the business. That's something that we are -- we have rationalized in some ways, but we still believe that within the next 12 months, we will be able to maximize that rationalization. And of course, that will result in a very significant cost savings and efficiencies. So these are just part as well as the pipeline. We have several products that are in the pipeline, new products that will be introduced probably starting by the end of this year going into '27. So that's in short summary, how we are going forward with the Food division. But as I mentioned earlier on my -- what I just said earlier, the scope and the magnitude of the -- our ability to integrate food and fresh together is significant, is really a dream. So we are very, very optimistic and very bullish for the future.

And so do you -- I guess the question, looking at this year's adjusted EBITDA and sales, it's a 5.6% EBITDA margin. Is that just a reflection of only really having to run Del Monte Foods -- the food assets for just 9 months. Is that what that is? Or because I would expect your EBITDA margin to be in the double digits, obviously, at some point. Is that where we're heading? And is that the reason why it's not there yet?

Absolutely right. Absolutely right. And don't forget that this year, in particular, Mitch, with all the headwinds we are facing since beginning of the year with everything that is going on around the world, we have so many headwinds in all fronts being the transportation, logistics, supply chain and the costs and the fuel transportation. I mean, it's not a normal year, let's say. So hopefully, '27 could be a normal year. Again, that would reflect significantly on the results and the cash flow.

But I agree with you, Mitch, our EBITDA margins going forward should be in that range. that you mentioned.

Okay. Great. And then it was nice to see the costs coming down. Is that -- what were -- what are the costs that $60 million to $70 million down to, I guess, you said, I think, $45 million to $55 million, I wrote down.

$55 million.

Is that...

Go ahead.

What comprises the reduction?

It's basically bunker fuel, diesel, fertilizer, we feel and we see that the markets have pulled back and they're not as negative as they were in when we first announced these expectations. And we have made also some changes on how we do things, how we're buying our products, our raw materials. So we're seeing an improvement.

And the Costa Rica colón, is that still a problem?

That's still a headwind. Yes. That's still a headwind.

Okay. Got it. And then on the banana side, lower volumes or, I guess, weak demand in North America. Is that weak demand? Is that sort of -- is that where you've maybe walked away from some unprofitable or less profitable business? Or are you actually seeing consumption declines in that segment, as a category?

I don't think it's consumption decline. I think there were -- unfortunately, competition has been extremely severe during the last 6-7 months from different players as well as higher cost at the origin. And going forward, I believe that situation cannot be sustainable, cannot continue like this because for argument's sake today, some competitors are selling fruit in the market for $11 while the cost at the farm is -- it is almost over $11. So that gives you an idea of what is happening in the market. I believe we rationalize our volumes in order not to go into this kind of vicious circle, which never ends. We are rationalizing our supply as well, sourcing itself, like we said earlier, like Monica mentioned. So we will be only sourcing fruit from where it makes sense to be able to be competitive in the market.

Banana is an important part of our business, and this is what we will continue to focus on, but in a much more, I would say, rational way.

And this points, Mitch, to the exit of some banana farms in Costa Rica and repurposing the land for our most important products, which is one of them is Del Monte Gold and Honeyglow. So...

Just to give you an idea, just because of the exchange rate in Costa Rica, the cost per box went up over $2 in the last year just because of the exchange rate. Just think about that.

So I'm sorry.

And it doesn't seem that the exchange rate is going to reverse or go back to the -- to what it used to be. I don't believe so. So I think we are going to make some decisions where it makes sense to us as a company and our interest going forward.

The 4 farms that you've closed the bit on the banana side and repurposing, is that on the East Coast or West Coast?

These are on the East Coast.

Okay. And then of those 4 farms, what percentage of the total banana of your own production was those 4 farms that you've closed roughly?

It's small actually. The total picture is small.

Yes, about 5% of the Costa Rica production, but some...

Okay. Okay. And then -- so on the pineapple side, you mentioned in the release higher production costs is that on the fertilizer on that side of the cost side? Or is there other -- is there yield issues or anything along those lines?

So on the pineapple, it's the same as everything else. The fertilizer, the diesel, the exchange rate in Costa Rica, that's what's really impacting the pineapple.

Okay. And I didn't see the Q yet, but how were pineapple sales in the quarter?

They were strong. The volume was a little bit lower this quarter than previous year, but it is just a cycle from the growing cycle and -- but very strong higher pricing.

Okay. Okay. Great. And then I guess last question, just going back to bananas. I wanted to -- we haven't -- I haven't heard any update on the Black Sigatoga or Panama disease. Any update that you could give us on the outlook there?

Well, Sigatoga is getting worse, to be honest with you. It's sort of -- especially this year is a lot more rainfall than previous years. So the more rain you get, the more Sigatoga infection spreads. And as far as the TR4, the Panama disease, you know that it has been reported that it's spreading in Ecuador further. And as I said, it's on many occasions before, is not if, it's when. And I think that is going to go to definitely spread to Central America itself down the road. And I mean, this is not a situation that will happen overnight. This can take 10, 15 years. But ultimately, it will happen. And I'm very convinced of that.

Okay. And then I guess just my final question is the -- on your fresh-cut business. How did that perform in the quarter? And any update on the outlook there?

Fresh-cut did well. It didn't increase from last year, but it stayed steady.

It's consistent, Mitch.

I'm sorry, I missed that.

I said the business is consistent. I mean, some variables would be because of fruit cost because what's happening in the market, supply chain, things like that. There were a little bit some difficulties, especially shipping from Mexico, Brazil, Peru and things like that sourcing. So there were hiccups. But all in all, it's consistent business, and we have kind of a strong position in that market.

So pricing was strong and definitely, same as with every other product, we were impacted by some of the inflation, but it's still demand is strong.

Your next question comes from the line of Anja Soderstrom from Sidoti.

Congratulations on the acquisition of Del Monte and this new chapter of the company. I'm just curious with the top line synergies, can you just sort of double-click on that and what some sort of near-term opportunities there you see in terms of cross-selling and maybe innovation?

Well, innovation, that's something that we will announce when it is already in the market. And as I mentioned earlier, some of these -- some products will start going into the shelves sometime at the end of this year and a lot more will be during '27. So there has been products that have been under development before we acquired Del Monte. Some of these were kind of we spread like we put it on a fast track and others that we kept on the back burner. So we will be announcing -- and the market, of course, will be informed of all these products when the time comes.

Looking forward to that.

I mean we will be introducing products that will be innovative and make a huge difference for the category that we are in.

And you will be able to sort of cross-innovate between the Del Monte Foods and Del Monte Fresh.

Absolutely. Between the fresh and the food, there will be a lot of synergies and a lot of -- I mean, just to give you an idea, pink pineapple, for instance, we were not being able to put it in any kind of packaging before. Now hopefully, by the end of the year, we will be -- this pink pineapple will be packaged as like our grapefruit and other segments in syrup, and it will be in the market within hopefully the next 3 months, 4 months, 5 months.

Okay. And then I'm just curious, you were talking about the adjustments to the footprint in Costa Rica with the purposing of the land for pineapples. What sort of -- what is the timing of that? And what goes into that in terms of costs? And when will you start seeing revenue coming in from those pineapples?

That's more of a long term. Growing the pineapple has a long growing cycle. So it's about 3- to 4-year cycle, but it's important to keep those lands for the higher-margin products. So this is very high-value land and we can grow pineapple there, but it is a long growing cycle.

I'm sorry, yes.

I will follow up on what Monica just mentioned that the benefit will be -- will appear very quickly because once we shut down these farms, the losses that we were incurring on running these farms will be immediately eliminated and it will show up on the bottom line. So that's very important aside from using these lines to maximize the value of these assets. It depends on how quickly we will transform it into pineapple. It could be 3 years, 4 years if we are not too agile. But I think we will be agile and this could be shortened by a year or 1.5 years.

Okay. That was helpful. And then I'm just curious, I thought you said you were also starting to repurposing some banana farms.

Yes. That's the whole idea is to -- every farm that is very excessive into cost and will never be viable, that farm will be shut down and turned into some other product, which is mainly would be the pineapple.

Okay. And it's the same there, the cost will go away quite quickly, but it will take a couple of years for that to produce something again?

Of course, after shutting these farms, you will take at least 2 years to start seeing the production of pineapples.

And as there are no further questions, I will now turn the call back over to Mr. Mohammad Abu-Ghazaleh for closing remarks.

I would like to thank everyone for participating on this call and hope to talk to you next time with even more exciting news. Thank you very much, and have a good day.

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Welcome to Fresh Del Monte Produce's 2026 Annual General Meeting of Shareholders. Today's Annual General Meeting is being broadcast live over the Internet and is being recorded. For opening remarks, I would like to turn today's call over to Christine Cannella, Vice President, Investor Relations with Fresh Del Monte Produce, who will serve as the moderator for today's Annual General Meeting of Shareholders. Please go ahead, Ms. Cannella.

Thank you, operator. Good morning, everyone, and welcome to Fresh Del Monte Produce's 2026 Annual General Meeting of Shareholders. As the operator mentioned, I'm Christine Cannella, Vice President, Investor Relations with Fresh Del Monte Produce. I will be moderating today's call. Today's annual meeting is being broadcast live over the Internet, and we thank you for participating in the virtual meeting. I hope you had a chance to review the annual report and the proxy statement. If not, they are available at www.envisionreports.com/FDP or at www.freshdelmonte.com, under the Investor Relations tab.

If you haven't already done so, please take a minute to view our agenda slide and the rules of conduct for today's annual meeting. We will hold a Q&A session during which we intend to answer, as time permits, those questions submitted during the meeting that are pertinent to the items being brought before the shareholders for vote today in accordance with our rules of conduct. [Operator Instructions].

As a reminder, if you have already voted your shares by sending in a proxy or voted via telephone or Internet, you do not need to take any further action. If you have not already voted your shares in advance, you will be able to vote your shares electronically during today's Annual General Meeting by clicking on the Cast Your Vote link on the meeting center site.

If you have technical issues during today's webcast, please click on the support link in the upper right of the broadcast screen, and someone will assist you. With that, I would like to turn today's call over to our Chairman and Chief Executive Officer, Mohammad Abu-Ghazaleh. Please go ahead, Mr. Abu-Ghazaleh.

Thank you, Mrs. Cannella. Good morning, and welcome to the 2026 Annual General Meeting of Shareholders of Fresh Del Monte Produce. As Mrs. Cannella mentioned, I am Mohammad Abu-Ghazaleh, Chairman of the Board and Chief Executive Officer of Fresh Del Monte Produce, and I will be presiding at this Annual General Meeting. I want to open by thanking all of you who have joined us today.

At this time, we will move to the formal portion of our meeting, and I will call the meeting to order. Present at the meeting today via telephone are directors, Amir Abu-Ghazaleh and Ahmad Abu-Ghazaleh; and our independent directors, Charles Beard, Jr.; Mary Ann Cloyd, Lori Tauber Marcus, Dr. Ajai Puri and Michael Berthelot, our Lead Independent Director. Other company officers in attendance via telephone are Mrs. Monica Vicente, Senior Vice President and Chief Financial Officer; and Mrs. Effie D. Silva, Senior Vice President, General Counsel, Corporate Secretary. Ms. Silva will serve as Secretary of today's meeting.

As you heard earlier, joining today's meeting and serving as moderator for today's meeting is Mrs. Christine Cannella with Fresh Del Monte Produce. Mr. [ Shawn Sharp ], a representative of Computershare is also on today's call. Mr. Sharp has been appointed to act as the Inspector of Elections for today's meeting. Mr. Mark Garces, Assurance Partner with Ernst & Young, is also present via telephone at today's meeting. The Secretary has delivered an affidavit of mailing establishing that notice of this meeting was duly given.

A copy of the notice of meeting and the affidavit of mailing will be incorporated into the minutes of this meeting. All shareholders of record at the close of business on April 13, 2026, are entitled to vote at this meeting. Our first order of business at this meeting is to determine whether the ordinary shares represented at the meeting are sufficient to constitute a quorum for the purpose of transacting business. Mrs. Silva, do you have a report, please?

Yes. The shareholders' list shows that holders of 47,531,139 ordinary shares of the company are entitled to vote at this meeting. We are informed by Mr. Sharp, Inspector of Election, that 44,776,276 of the issued ordinary shares of the company or approximately 94% of the total issued ordinary shares of the company are entitled to vote at this meeting.

Thank you, Ms. Silva. Based upon the percentage of total ordinary shares of the company held by holders of record now present at the meeting, either in person or represented by proxy, a quorum is present. This meeting is now duly convened for purposes of transacting such business properly before it. The next order of business is a description of the matters to be voted on at today's meeting. The first proposal before the shareholders of the company is the election of 2 directors to serve a 3-year term expiring at the Annual General Meeting of Shareholders in 2029.

The Board of Directors recommends a vote for the election of the following director nominees: Michael J. Berthelot, Lori Tauber Marcus. Proposal #2, ratify the appointment of Ernst & Young LLP as independent registered certified public accounting firm for the 2026 fiscal year. The Board of Directors recommends a vote for the ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the 2026 fiscal year.

Proposal #3, approval by nonbinding advisory vote of the compensation of our named executive officers as disclosed in the proxy statement for the 2025 fiscal year. The Board of Directors recommends a vote for the approval of the company's executive compensation.

Proposal #4, approval and adoption of the third amended and restated memorandum and Articles of Association. The Board recommends a vote for the approval of the company's third amended and restated memorandum and Articles of Association. I will now turn the call over to Mrs. Christine Cannella to begin the question-and-answer session regarding the proposals. Mrs. Cannella?

[Operator Instructions] For all other inquiries regarding Fresh Del Monte Produce, please feel free to reach out to me directly. I would like to remind you that the answers we give in response to your questions may include forward-looking statements within the safe harbor provisions of the federal securities laws.

Actual results may differ materially from these forward-looking statements because of a variety of risks and uncertainties about our business, which are described in our most recent filings with the SEC, including our 2025 annual report on Form 10-K. All forward-looking statements are as of today, June 4, and we assume no obligation to update such statements. Mr. Chairman, there are no questions. This concludes the question-and-answer session of Fresh Del Monte Produce's Annual General Meeting.

The inspector of election will now look for any outstanding votes that may have been cast during the meeting. The online voting will now be closed, and I hereby declare the polls closed. Proxies will be held in the position of the inspector of election. The inspector of election will tabulate the votes. Will the secretary please report the preliminary results of voting?

We have been informed by the inspector of election that the votes have been counted and that the preliminary results of the voting are as follows: the nominees for election to the Board of Directors have been duly elected. The appointment of Ernst & Young as independent registered certified public accounting firm for the 2026 fiscal year has been ratified.

The company's executive compensation for the 2025 fiscal year has been approved and the adoption of the company's third amended and restated memorandum and Articles of Association has been approved. The results of the voting on these items will be reported in a Form 8-K filing by the company within 4 business days after the final voting results are tabulated.

Thank you, Mrs. Effie, and the 2026 Annual General Meeting of Shareholders is adjourned. Thank you for joining us. I will now turn today's meeting back to our operator.

Thank you, Mr. Abu-Ghazaleh. Today's webcast has concluded. You may disconnect at this time.

Good day, everyone, and welcome to Fresh Del Monte Produce First Quarter 2026 Conference Call. Today's call is being broadcast live over the Internet and is also being recorded for playback purposes. [Operator Instructions] Thank you.

For opening remarks and introductions, I would like to turn today's call over to the Vice President, Investor Relations with Fresh Del Monte Produce, Ms. Christine Cannella. Please go ahead, Ms. Cannella.

Thank you, Krista. Good day, everyone, and thank you for joining our first quarter 2026 conference call.

Joining me in today's discussion are Mr. Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer; and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer.

I hope that you have had a chance to review the press release that was issued earlier via Business Wire. You may also visit the company's IR website at investorrelations.freshdelmonte.com to access today's earnings materials and to register for future distribution. This conference call is being webcast live on our website and will be available for replay after this call.

Please note that, our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website.

I would like to remind you that much of the information we will be speaking to today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the federal securities laws.

In today's press release and our SEC filings, we detail risks that may cause our future results to differ materially from these forward-looking statements. Our statements are as of today, May 5, 2026, and we have no obligation to update any forward-looking statements we may make.

During the call, we will provide a business update, along with an overview of our financial results, followed by a question-and-answer session

With that, I will turn today's call over to Mr. Mohammad Abu-Ghazaleh. Please go ahead.

Thank you, Christine. Good morning, everyone, and thank you for joining us. Following up on our last quarter, we reached an important milestone this quarter with the closing of the Del Monte Foods transaction, bringing the brand back under a single owner for the first time in nearly 4 decades. The quarter included approximately 1 week of contribution from the acquired business. So the financial impact in the quarter is limited due to timing.

We are encouraged by the initial performance of the Del Monte Food business, and we see clear opportunity as we begin to thoughtfully scale the business and believe there is a meaningful opportunity to realize the full potential of these assets.

As I mentioned during our last call, this acquisition is not expansion for expansion's sake. It's alignment, bringing the brand, the portfolio and the platform back under a single focused owner. This acquisition not only reunites one of the oldest and most recognized brands in the world, but it also positions us to operate from a more complete platform, expanding our presence across both the perimeter and center of the store and allowing us to offer customers a broader, more integrated portfolio.

Our priority during this early phase remains continuity, ensuring stability for customers, partners and employees, while taking a disciplined approach to evaluating the business and identifying where we see the strongest opportunities.

We are focused on strengthening the platform, prioritizing key customer relationships and building a more focused, high-quality portfolio over time.

It is important to dedicate a portion of today's call to discuss the broader environment shaping our business, the industry and the global food system.

The conflict in the Middle East has introduced a meaningful shock across key input fundamentals to food production, energy, fertilizers, packaging and transportation. There is no part of agriculture that is not energy dependent from inputs to packaging to transportation. As a result, movements in energy costs do not remain isolated. They cascade through the entire system.

Agriculture does not operate in real time. The timing of impact varies meaningfully by category. In crops like pineapples, for instance, where production cycles extend to approximately 18 months, the inputs being deployed today will be reflected in cost and pricing later this year. Bananas by contrast, move more quickly through the system and therefore, respond more immediately to changes in input costs.

As a result, the pressures that emerged during the quarter are now embedded in the system and will continue to move through the value chain in the periods ahead, regardless of how conditions in the Middle East evolve from here.

We are already seeing this dynamic take hold from higher fertilizers and packaging costs to increase ocean freight and inland transportation driven by fuel and labor. The impact is more pronounced in our fresh business given its production cycles and input intensity, while other parts of the portfolio are affected differently based on their supply chain structures.

This is not a short-term volatility. It's a natural transmission of input costs through a global time lag system. The situation remains dynamic, and we are managing the business with discipline and flexibility. This is an environment we are well positioned to navigate, but it will not be without challenges. We expect pressure to build in the coming quarters, particularly in the second and third quarter, as these costs continue to flow through the system and the full impact move through the value chain.

Our global footprint, diversified sourcing and integrated supply chain enable us to adjust and respond across markets. While our scale and disciplined execution position us to manage through this period effectively, these are the conditions where those advantages become more evident. We have navigated complex operating environments before, and we will continue to do so with clear focus on execution, cost management and operational efficiency.

With that, I will turn it over to Monica Vicente, our CFO, to discuss our financial results.

Thank you, Mr. Abu-Ghazaleh, and thank you, everyone, for joining us this morning. I will begin with our first quarter results and then share our expectations for the year ahead. I will cover key items affecting comparability, most notably the Del Monte Foods acquisition and updates to our segment reporting structure.

We closed the Del Monte Foods acquisition late in the quarter. Results include 1 week of contribution and have no meaningful impact on the first quarter results. We are assessing the cost structure and spending profile to establish a near-term cost baseline while identifying efficiency opportunities we expect to execute over time.

We are also evaluating the operating footprint, including a recent purchase of a warehouse previously leased by Del Monte Foods in Wisconsin with a focus on optimizing asset utilization and portfolio alignment across our facilities.

We paid a total cash consideration of $308 million, which included $285 million base purchase price plus $23 million in cash, representing wind-down and closing costs, along with adjustments for working capital associated with the transaction.

The acquisition was funded through a combination of cash on hand and borrowings under our revolving credit facility. The consideration closely approximated the fair value of the identifiable net assets acquired. The acquisition is expected to be accretive to net sales by $600 million and adjusted EBITDA by approximately $23 million in 2026 as operations normalize.

As a result of the acquisition, beginning this quarter, we updated our business segment reporting to better align with internal management reporting. A new reportable segment, Prepared Foods, combines the Del Monte Foods business acquired with our existing Prepared Foods operations.

Prior period segment information has been recast for comparability. We also completed the previously announced divestiture of Mann Packing in December 2025.

Our first quarter results reflect continuing operations. Prior period comparisons are presented as reported and where applicable on an adjusted basis with reconciliations in today's earnings press release.

With that context, I will turn now to our first quarter financial performance. Year-over-year results reflect portfolio changes following the divestiture of Mann Packing, alongside pricing, volume, cost and foreign exchange dynamics, as well as the recent geopolitical developments.

Net sales were $1 billion, primarily driven by lower net sales in our fresh and value-added products segment. This reflected the divestiture of Mann Packing and lower net sales in our avocado product line due to industry-wide oversupply, which resulted in lower per unit selling prices. The decrease was partially offset by the initial contribution of Del Monte Foods and the favorable impact of fluctuations in exchange rates, primarily the euro.

Gross profit was $89 million, reflecting lower gross profit in our other products and services and Prepared Foods segment, where results were impacted by lower selling prices in our poultry and meats business due to softer demand and the conflict in the Middle East.

In our Prepared Foods segment, higher per unit production costs weighed on results. Gross profit was generally affected by supply chain disruptions in the Strait of Hormuz and the unfavorable impact of a stronger Costa Rica colon. These impacts were partially offset by higher per unit selling prices in our banana and pineapple product lines, as well as the contribution of Del Monte Foods.

Gross margin increased to 8.5%. Adjusted gross profit was $91 million and adjusted gross margin was 8.7%. Operating income was $20 million, primarily driven by higher asset impairment and other charges net.

Adjusted operating income was $40 million. Asset impairment and other charges were related to the Foods acquisition.

Income from equity method investments was $7 million. The increase reflected higher equity earnings from unconsolidated investments, primarily from distributions received in excess of our carrying value upon the liquidation of a fund in which we previously held an interest.

Fresh Del Monte net income was $10 million. And on an adjusted basis, Fresh Del Monte net income was $30 million. We delivered earnings per share of $0.21 and adjusted earnings per diluted share of $0.63.

Adjusted EBITDA was $58 million, with a margin of 6% as a percentage of net sales, reflecting disciplined cost management amid a dynamic cost environment.

I will now go into more detail on the quarter performance for each of our business segments, starting with our fresh and value-added products segment.

Net sales were $549 million, primarily driven by strategic reductions in our fresh and fresh-cut vegetable product lines, reflecting the divestiture of Mann Packing, as well as lower per unit selling prices in our avocado product line driven by industry-wide oversupply. These declines were partially offset by higher net sales in our pineapple product line, reflecting higher per unit selling prices and the favorable impact of exchange rate movements, primarily the euro.

Gross profit was $60 million, driven by the divestiture of Mann Packing, which generated negative gross profit in the prior year, as well as higher per unit selling prices in our pineapple product line. The increase was partially offset by higher per unit production costs as well as weather-related events in North America that negatively impacted sales volume in our fresh-cut fruit product line and contributed to lower per unit selling prices in our melon product line. Gross margin increased to 10.9%. Adjusted gross profit was $61 million.

Turning to our banana segment. Net sales were $357 million, primarily driven by lower volume and market disruptions across regions, including adverse weather and supplier changes. The decrease was partially offset by higher per unit selling prices across all regions and the favorable impact of fluctuations in exchange rates.

Gross profit was $16 million, driven by higher per unit production and procurement costs, partially offset by higher per unit selling prices. Gross margin was in line at 4.6%. Adjusted gross profit was $18 million and adjusted gross margin increased to 5%.

Moving to our Prepared Foods segment. Results reflected 1 week of contribution from the Fresh Del Monte Foods acquisition, along with contributions from our existing Prepared Foods operations. Net sales were $83 million, including $22 million of net sales from the acquisition, partially offset by lower net sales in Europe due to supply availability constraints of pineapple used in our canned pineapple product line.

Gross profit was $9 million, primarily driven by lower net sales in Europe and higher per unit production and distribution costs. Gross margin decreased to 10.8%.

Lastly, our results for other products and services segment. Net sales were $56 million, driven by higher net sales of our third-party freight services business, partially offset by lower net sales in our poultry and meats business due to lower per unit selling prices. Gross profit was $4 million and gross margin decreased to 6.8%.

Now moving to selected financial results for the first quarter of 2026. Our income tax provision was $8 million, reflecting changes in the global tax and regulatory environment and higher earnings in certain jurisdictions. Net cash provided by operating activities was $44 million.

Cash flow was primarily driven by net earnings and partially offset by higher noncash items, including asset impairments as well as working capital movements, mainly lower inventory levels and higher trade receivables due to the timing of period-end collections.

Turning to capital allocation. At the end of the first quarter, long-term debt stood at $438 million, and our average adjusted leverage ratio is at 1.4x EBITDA. This compares to $173 million in long-term debt at year-end, with the increase reflecting the closing of the Del Monte Foods acquisition.

Capital expenditures totaled $14 million during the quarter, reflecting pineapple expansion and packing facility construction in Costa Rica, equipment investments in Kenya and the replacement and maintenance capital.

As previously announced, our Board of Directors declared a quarterly cash dividend of $0.30 per share payable on June 11, 2026, to shareholders of record as of May 19, 2026. On an annualized basis, this equates to $1.20 per share, representing a dividend yield of approximately 3% based on our current share price.

During the quarter, we repurchased 100,000 shares of our common stock for $4 million at an average price of $40.24 per share. As of March 27, we had $116 million available under our $150 million share repurchase program.

Together, our capital allocation actions during the quarter, including dividends, share repurchases and the completion of the Del Monte Foods acquisition reflect our balanced approach to capital deployment. We continue to prioritize reinvestment in the business and a competitive, reliable return to shareholders.

Turning to our outlook for the full year of 2026. We are providing our expectations for our business segments and key financial priorities, including SG&A, capital expenditures and cash flows. This outlook is based on the information available to us today and our experience managing through comparable industry and macroeconomic cycles.

Given the current environment, our priorities for 2026 are clear: first, protecting the long-term earnings power of the portfolio; second, maintaining balance sheet and liquidity flexibility; and third, managing through near-term volatility with discipline.

Our 2026 outlook reflects Fresh Del Monte's continuing operations. It excludes the Mann Packing business exited in December 2025 and includes 9 months of contribution from Del Monte Foods transaction.

We expect net sales on a continuing operation basis to increase between 13% and 15% year-over-year, reflecting execution across our base business and the contribution from the Del Monte Foods transaction, which we expect will contribute $600 million of net sales in 2026.

As discussed, developments in the Middle East have driven higher energy, shipping and commodity input costs. Based on current assumptions and observable market conditions, we estimate the impact of these cost pressures to be approximately $40 million to $45 million, which will impact us starting in the second quarter. These impacts are primarily related to ocean freight costs, including bunker fuel and war-related surcharges, inland transportation, fertilizer and packaging costs, consistent with recent elevated oil and fuel price trends.

Our outlook also reflects approximately $20 million to $25 million of headwinds over the balance of the year, roughly 50% from foreign exchange impacts, primarily related to the Costa Rica colon and the remainder driven by higher domestic transportation and logistic costs resulting from shortage of -- of driver availability in the U.S.

Separately, tariffs implemented beginning in March 2025 continue to function largely as a pass-through. Tariffs had a modest impact in the first quarter. And given the uncertainty around recoverability and timing, we have not assumed any tariff refunds.

In banana, near-term industry supply and cost dynamics, combined with trade dislocations following Middle East-related disruptions are creating incremental volume pressure in North America and Europe markets, which is reflected in our guidance. At the same time, per unit costs are higher, driven by lower production from Costa Rica and the disease management efforts on our own farms. Fertilizer inflation has added further pressure. These headwinds are reflected in the segment gross margin ranges we are providing today.

Consistent with our established cost management approach, our outlook reflects a disciplined and active response to the current environment. This includes targeted pricing actions where market and customer dynamics support them, contractual fuel recovery mechanisms and continued focus on cost containment and operational efficiency.

Just as important, it reflects ongoing deliberate trade-offs around timing, mix and service to protect customer relationships, sustain throughput and preserve long-term earning capacity during a period of elevated volatility.

Turning to gross margin expectations by segment. In our fresh and value-added products segment, we expect gross margin to be in the range of 11% to 12% compared with 14% last year. This reflects higher per unit production and distribution costs across the segment as well as industry-wide supply constraints in pineapple volumes that limit our ability to fully benefit from increased market demand from our premium pineapple varieties.

In our banana segment, we expect gross margin to be in the range of 3% to 4%, consistent with the cost supply and market dynamics discussed before.

In our Prepared Foods segment, we expect gross margin to be in the range of 13% to 14%. This reflects the combination of Del Monte Foods transaction, which brings an inherently higher-margin branded CPG profile with our existing Prepared Foods operations as well as integration, timing, input cost volatility, and mix across geographies.

Importantly, the reported range does not yet reflect the full margin potential of the Del Monte Foods platform as integration progresses. In our other products and services segment, we expect gross margin to be in the range of 12% to 13%, consistent with prior years.

Selling, general and administrative expense is expected to be in the range of $270 million to $280 million, reflecting the inclusion of Del Monte Foods and our intentional shift to a branded CPG operating model, which carries a higher SG&A profile than our historical fresh produce operations. This range also includes wage inflation and targeted investments in technology and organizational support to operate and scale a global branded foods platform.

Capital expenditures for the full year are expected to be in the range of $85 million to $95 million, focused on production expansion in Central America, growth in our fresh cut and Prepared Foods operations in Europe, a recent warehouse investment and other investments related to the Del Monte Foods acquisition as well as investments in core technology systems.

For the full year, we expect net cash provided by operating activities to be in the range of $40 million to $50 million, which reflects lower cash generation than we historically produced as a pure fresh produce company.

With the addition of Del Monte Foods, our cash profile now reflects the seasonal working capital dynamics of a branded CPG business. This includes higher working capital requirements in the second and third quarters as inventories are built to support seasonal packing and processing activities that ramp through the harvest season and peak from summer through fall.

As those inventories convert to sales, we expect stronger cash generation in the fourth quarter and into the first quarter, driven by peak demand during November and December holiday season and again around the Easter holiday period. Due to the timing of the acquisition, working capital needs will be higher in 2026 than in future periods.

In summary, while the operating environment remains challenging, we believe the underlying fundamentals of our portfolio are sound, and our focus remains on disciplined execution, prudent capital allocation, protecting long-term value, consistent cash generation across the full operating cycle and maintaining flexibility and financial resilience as conditions evolve.

This concludes our financial review. We can now turn the call over to Q&A. Krista?

[Operator Instructions] And we have no questions at this time. I would like to turn the conference back over to Mr. Mohammad Abu-Ghazaleh for closing comments.

Thank you, Krista, and thank you everyone for joining us today, and hope to speak with you on our next call of the second quarter. Thank you, everyone, and have a good day.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.

Good day, everyone, and welcome to Fresh Del Monte Produce's Fourth Quarter and Full Fiscal Year 2025 Conference Call. Today's conference call is being broadcast live over the Internet and is also being recorded for playback purposes. [Operator Instructions]

For opening remarks and introductions, I would like to turn today's call over to the Vice President, Investor Relations with Fresh Del Monte Produce, Ms. Christine Cannella. Please go ahead, Ms. Cannella.

Thank you, Kate. Good morning, everyone, and thank you for joining our fourth quarter and full fiscal year 2025 conference call. Joining me in today's discussion are Mr. Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer; and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer. I hope that you had a chance to review the press release that was issued earlier via Business Wire. You may also visit the company's IR website at investorrelations.freshdelmonte.com to access today's earnings materials and to register for future distributions.

This conference call is being webcast live on our website and will be available for replay after this call. Please note that our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website. I would like to remind you that much of the information we will be speaking to today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the federal securities laws.

In today's press release and in our SEC filings, we detail risks that may cause our future results to differ materially from these forward-looking statements. Our statements are as of today, February 18, 2026, and we have no obligation to update any forward-looking statements we may make. During the call, we will provide a business outlook, along with an overview of our financial results, followed by a question-and-answer session.

With that, I will now turn today's call over to Mr. Mohammad Abu-Ghazaleh. Please go ahead.

Thank you, Christine. Good morning, everyone, and thank you for joining us. Fiscal 2025 marked a clear inflection point for Fresh Del Monte. It was not just a year of performance, it was a year of preparation. Our results this quarter underscores a fundamental shift in our approach for the past 2 years. We have moved from a broad market strategy to a relentless focus on our core strengths.

By streamlining our portfolio and divesting from noncore distractions, we have ensured that our best-performing categories receive the capital and focus they deserve. This strategic narrowing is supported by a culture of rigorous financial discipline and accountability. Rather than pursuing scale indiscriminately, we have prioritized operational efficiency and high-return investments. Together, those choices strengthened our balance sheet, expanded margins and generated the cash flow needed to preserve flexibility and reinvest for long-term leadership.

Those choices were deliberate. They were about focus. They were about discipline, and they were about ensuring that when the right moment arrived, we were ready to act from a position of strength. That moment is now. As many of you have been following, we are in a process of acquiring select assets from California-based Del Monte Foods through a court supervised bankruptcy process. Earlier this month, the U.S. Bankruptcy Court approved Fresh Del Monte as the purchaser of global Del Monte brand, along with select core assets. With that approval, we moved meaningfully closer to closing. We expect the transaction to close before the end of first quarter subject to customary regulatory approvals, including HSR antitrust clearance and remaining closing conditions.

This decision is not about expansion or -- for expansion sake. It's about alignment. For nearly 40 years, the Del Monte brand has existed across separate platforms. Today, we have the opportunity to unify the brand under a company with a deep agricultural roots, global operating scale and decades of experience managing complex food systems across geographies and categories. There is a strong sense internally that this feels like a reunion. For me, this moment is deeply personal. Bringing Del Monte back together has been a long-held conviction of mine. And it is coming to fruition on the 30th anniversary of when I acquired Fresh Del Monte in 1996.

I truly believe that uniting the fresh and staple food under a single strategy honors the Del Monte legacy while positioning the brand for continued relevance and growth. It allows us to show up more consistently for consumers and to build a stronger, more flexible platform focused on efficiency innovation and long-term value creation. Del Monte is 140 years old brand and one of the most recognized names in food worldwide, built on trust, quality and longevity. These are established businesses with experienced teams, strong customer relationships and products that consumers know well.

Our first priority is continuity. As we move through the remaining regulatory reviews and closing conditions, our focus is on stability for customers, retailers, partners and employees. Post closing, the acquired business will function as a dedicated unit, ensuring immediate operational continuity while we take a measured approach to integrating capabilities.

By utilizing a light touch integration strategy, the Food division will retain its autonomy to preserve its agility and customer focus. We will serve as a growth accelerator, empowering the unit with our capital resources, supply chain scale and logistic infrastructure. Our Food division teams, both commercial and production across Latin America, Europe, Africa and the Middle East will work hand-in-hand with our Food division in North America to expand and leverage on the capabilities of each other.

Fresh Del Monte has spent decades operating at global scale across fresh and value-added categories. This experience give us confidence not just in completing this transaction, but in managing what comes next. We see a clear opportunity to build a more unified platform that supports durable long-term value creation. As we look ahead to 2026, our priorities remain clear, disciplined decision-making, thoughtful capital allocation and execution anchored on our core strength.

With that, I will turn over to Monica to discuss our financial results.

Thank you, Mr. Abu-Ghazaleh, and thank you, everyone, for joining us today. Before getting into the financial results, I would like to highlight several important developments.

First, as Mr. Abu-Ghazaleh mentioned, we recently received court approval to pursue the acquisition of select assets of Del Monte Foods Corporation. The assets include the vegetable tomato and refrigerated fruit businesses, primarily under the Del Monte, S&W and Contadina brands. The transaction also includes global ownership of the Del Monte brand and related intellectual property subject to existing licensing agreements.

Operationally, we expect to acquire 4 facilities in the United States, 2 facilities in Mexico and 1 operation in Venezuela as well as related customer and supplier contracts and inventory at closing. The purchase price is $285 million plus the assumption of certain liabilities. The transaction remains subject to HSR antitrust clearance with closing expected in the first quarter.

Given the court supervised nature of the process and the carve-out of assets from an integrated business, it is premature to comment on accretion, synergies or fair value at this time. Details on segment reporting, expected financial contributions and integration priorities will be provided during our first quarter 2026 earnings call.

Turning to our fourth quarter. We continue to simplify and optimize our portfolio. We sold 3 older break bulk vessels as part of our ongoing efforts to modernize and rightsize our logistics footprint. As a result, our own fleet now consists of 6 modern vessels, appropriately sized to support our global supply chain while maintaining operational flexibility.

We also completed the previously announced divestiture of Mann Packing which closed in December 2025. This represents an important milestone in simplifying our portfolio and exiting a business that was no longer aligned with our long-term strategic and financial objectives. Accordingly, today's discussion will reference results both as reported and where appropriate on an adjusted basis to provide a clear view of the underlying performance of our continuing business.

Turning to our financial performance, starting with the fourth quarter. As Christine mentioned, reconciliations are available in today's press release and earnings presentation on our website. Net sales were $1.02 billion, driven by higher net sales in our Other Products and Services and Banana segments, reflecting strong demand for our third-party ocean freight business, and the Banana segment benefited from higher per unit selling prices. These gains were supported by tariff-related price adjustments in North America as well as favorable foreign exchange related to the euro. The increase was partially offset by lower net sales in our fresh and value-added segment, which was largely the result of reduced sales volume in the fresh-cut vegetable product line following the strategic operational actions we took in late 2024.

On an adjusted basis, net sales were $968 million. Gross profit was $106 million, reflecting higher gross profit across all business segments. The increase was due to higher per unit selling prices, partially offset by higher overall per unit distribution costs as well as increased production and procurement costs in our banana segment. Gross margin increased to 10.4%. Adjusted gross profit was $109 million and adjusted gross margin increased to 11.3%.

Operating income was $46 million, which was driven by higher gross profit, partially offset by lower gain on the sale of property, plant and equipment, reflecting the prior year sale of our Toronto distribution center. Adjusted operating income was $48 million. Fresh Del Monte net income was $32 million and adjusted basis Fresh Del Mante net income was $33 million. Our diluted earnings per share was $0.67 and adjusted diluted earnings per share were $0.70. Adjusted EBITDA was $67 million.

Turning to our full year 2025 financial performance. Net sales were $4.3 billion, driven by higher net sales across all our business segments. The increase reflected higher per unit selling prices in the fresh and value-added and banana segment. The effects of tariff-related price adjustments in North America as well as favorable impact from foreign exchange rates related to the euro and British pound. The increase was partially offset by lower sales volume in our fresh-cut vegetable product line following the strategic operational actions previously mentioned.

Adjusted net sales were $4.1 billion. Gross profit was $399 million, driven by higher net sales in our fresh and value-added segment. The increase was partially offset by higher per unit production and procurement costs in our banana segment, along with increased distribution costs. Gross margin increased to 9.2%. Adjusted gross profit was $427 million and adjusted gross margin increased to 10.4%

Operating income was $137 million, reflecting higher asset impairment charges related to low productivity in banana farms in the Philippines and charges related to the divestiture of Mann Packing, along with a lower gain on property disposal of property, plant and equipment. The decrease was partially offset by higher gross profit. Adjusted operating income was $222 million. Fresh Del Monte net income was $91 million, while on an adjusted basis, net income attributed to Fresh Del Monte was $178 million. Our diluted earnings per share was $1.88, and adjusted diluted earnings per share was $3.68 per share. Adjusted EBITDA was $300 million.

I will now go more into details of the full year performance for each of our business segments, starting with fresh and value-added product segment. Net sales were $2.6 billion, driven by higher per unit selling prices in our pineapples and higher per unit selling prices and sales volume in our fresh-cut product line, supported by strong market demand. Pricing also benefited from tariff-related increases in North America and favorable exchange rate from a stronger British pound. The increase was partially offset by lower net sales in our fresh-cut vegetable product lines, reflecting the previously mentioned operational changes.

Adjusted net sales were $2.4 billion. Gross profit was $299 million, driven by the higher net sales in our pineapple product line, reflecting a favorable mix of our premium pineapple varieties. The increase was partially offset by higher distribution costs. Gross margin increased to 11.4%. Adjusted gross profit was $328 million and adjusted gross margin increased to 13.7%.

Moving to our banana segment. Net sales were $1.5 billion, driven by higher per unit selling prices in North America, reflecting tariff-related adjustments and lower industry supply, supported by increased market demand and favorable foreign exchange from a stronger euro. Sales volume also improved in the Middle East as the prior year was impacted by shipment disruptions related to the Red Sea conflict. The increase was partially offset by lower sales volume in Asia due to reduced supply and softer market demand.

Gross profit was $71 million. The decrease reflects higher per unit production and procurement costs due to adverse weather in our growing regions, processes, including Black Sigatoka, higher distribution costs and an allowance recorded on our receivable from an independent grower in Asia related to low productivity. The decrease was partially offset by higher net sales. Gross margin decreased to 4.8%. Adjusted gross profit was $70 million and adjusted gross margin was 4.7%.

Lastly, our full year results for Other Products and Services segment. Net sales were $210 million, driven by higher net sales in our third-party ocean freight business, reflecting increased volume and a more favorable cargo mix as well as higher net sales in our Specialty Ingredients business. The increase was partially offset by lower net sales in our Jordan poultry and meats business due to reduced sales volume and lower per unit selling prices. Gross profit was $29 million, driven by higher net sales, partially offset by higher production costs. Gross margin decreased to 13.7%.

Now moving to select financial data for the full year 2025. Our income tax provision for the full year was $37 million, reflecting changes in the global tax and regulatory environment and higher earnings in certain jurisdictions. Net cash provided by operating activities was $245 million, driven by net earnings and changes in noncash items. Working capital movements also impacted operating cash flow, reflecting lower accounts receivable balances compared to the prior year, partially offset by lower accounts payable and accrued expenses due to the timing of customer receipts and supplier payments.

At year-end, long-term debt was $173 million, and our adjusted leverage ratio remained below 1x EBITDA. We entered 2026 with a strong capital structure that supports both our ongoing investments and the acquisition we expect to close in the first quarter. Capital expenditures for the full year totaled $64 million. Investments during 2025 focused on enhancing our banana and pineapple operations in Central America, upgrading operations and production facilities in North America and improving pineapple operations in Kenya.

As announced in our press release, our Board of Directors declared a quarterly cash dividend of $0.30 per share payable on March 27, 2026, to shareholders of record as of March 4, 2026. On an annualized basis, this equates to $1.20 per share, representing a dividend yield of approximately 3% based on our current share price.

During the year, we repurchased 866,000 shares of our common stock for $30 million at an average price of $34.44 per share. As of December, we had $120 million available under our share repurchase program. Together, our dividend policy and share repurchase activity reflect our disciplined approach to capital allocation. In addition to sustaining a competitive and reliable return to shareholders, we continue to prioritize strategic investments that support long-term growth, including the Del Monte Foods transaction. We believe this balanced approach positions us well to create long-term shareholder value.

Turning to our outlook for the full year 2026. We will share expectations for our business segments and outline our key financial priorities, including SG&A and cash flows. Our guidance reflects baseline assumptions and the information available to us today. Our 2026 outlook excludes the divested Mann Packing business, which we exited in December 2025 and does not include any contribution from the Del Monte Foods pending transaction.

As always, our guidance incorporates a range of risks and uncertainties, including macroeconomic conditions, industry dynamics and other factors outside of our control. We expect net sales on a continuing operating basis to be 1% to 2% higher for the full year, driven by higher per unit selling prices. As far as gross margin by segment, in our fresh and value-added segment, we expect gross margin to be in the range of 12% to 14%.

Demand for our premium pineapple varieties remain strong. However, industry-wide supply constraints limit our ability to fully benefit from increased market demand. In our banana segment, we expect gross margin to be in the range of 5% to 6%. This outlook reflects ongoing cost pressures, including disease management in our own farms and competitive conditions across contracted and spot fruit sourcing.

We also expect some disruption from logistic challenges, including weather-related impacts and congestion at key ports. Notably, our Q1 projections account for headwinds caused by the extreme snowfall and freezing conditions across the United States earlier this quarter. These weather events disrupted domestic distribution networks and slowed throughput at several of our primary Northern terminals in addition to shutdowns at some of our fresh-cut facilities and distribution centers during that period.

Market demand in North America and Europe remains strong. The Middle East is stable and market demand in Asia, particularly Japan and Korea continues to trend lower year-over-year. For our Other Products and Services segment, we expect gross margin to be in the range of 12% to 13%.

Moving on to our selling, general and administrative expenses. We expect to be in the range of $210 million to $215 million, reflecting wage inflation and targeted investments in technology and organizational support. For the full year, we expect net cash provided by operating activities to be in the range of $220 million to $230 million.

This concludes our financial review. We can now turn the call over to Q&A. Kate?

[Operator Instructions] Your first question comes from the line of Mitchell Pinheiro with Sturdivant & Company.

So I got a bunch of questions. First, it was -- what really stood out in the quarter to me was margins in your fresh-cut -- your value add, I should say, your value add. And I'm curious, you talked about in your guidance, a gross margin in the 12% to 14% range. The adjusted gross margin in this last quarter was 14.8%. Are you taking a little bit of a conservative view? Or -- you talked about pineapples and some cost pressures there and just in general, is it a conservative view? Or is 14.8% something that you think you could attain on a more sustainable basis longer term?

We feel comfortable with the guidance we're giving of 12% to 14%. As you may recall, we actually are increasing it by the 100 basis points. So we feel comfortable with 12% to 14% for the year.

Okay. And within the fresh and value add, you didn't talk a lot about fresh-cut. Could you talk a little bit about the trends there in the fourth quarter and how -- what you expect for 2026?

Fresh-cut is performing very well. Demand is strong. Our volumes are up and as well as pricing. So one of the things we expect next year or 2026 is continued strong demand for the fresh-cut line with good margins.

Okay. And is that -- yes. And is that demand geographically broad-based? Or is there any particular geography that's outperforming?

Well, the U.S. is our largest fresh-cut business, but the U.K. is also very strong. So that has been performing very well as well.

Okay. And so can you talk a little bit about your pineapple business? You talked about -- obviously, there's strong demand, but you have supply issues. Any update on maybe when supply expand a little bit. And also talk, if you could, about how you're looking with the Honeyglow and the Pink pineapple.

As far as the pineapple concerned, it is a fact that the market demand is higher than the supply as we speak right now. Our idea is that we are expanding our production in Costa Rica. We are -- as we speak, we are planting new acreage. So that would be mainly for North America and some to Europe. But we are as well expanding production into Brazil to support our European market, but that will take 2, 3 years from now to be able to supply this market.

So we, in general, are expanding somehow our volumes through new plantation. However, don't forget that there is a restriction on land availability as well as government approvals to -- it's becoming an issue, of course, in Costa Rica that you cannot plant everywhere and there are restrictions regarding environment and other reasons as well. So in our opinion that the market for pineapples, in particular to us is stable, continuing stable.

Now as far as pink pineapple, as we mentioned, I mean, on many occasions before, Mitch, that we did not increase our acreage. And so whatever we have right now is going -- at full production is going into the market. And now it is -- the pricing, of course, it's a different category from the main gold pineapple. So that is also helping us.

The Honeyglow is also a growing category. But you know that this is also restricted by weather and by the way that they manage the farms. We do have a good percentage of our volume now coming as Honeyglow into the market. And that, of course, achieves a premium pricing to the main variety. But all in all, I think that demand continues to outstrip supply as we speak, especially for Del Monte. Del Monte has a different quality, different pineapple from the rest of the industry.

Great. Okay. And then -- so on the banana side, you still got, obviously, the cost pressures with your -- and it remains competitive. I was curious in the last quarter, I didn't see any breakdown, but how did North America fare relative to Europe and the rest of the world, Middle East and Asia in bananas?

North America has been doing quite reasonably well. We have -- as you know, that we did not go for volume, we went for profitability. And we have said that before on many occasions that we are not going out for volume, but rather than for the bottom line. And if any business makes sense to us, of course, we do the sale. But -- and that's why you see our banana business maybe in volume has gone down, but we maintained our margins and our profitability.

So that's the kind of policy we are going to be following going forward, maintaining that we deliver the highest quality product to the market, but also at a price that can make sense to us and bring the margins that this business should generate.

And Mitch, what really impacted our margins in banana this year was Asia mostly. So unfortunately, that dragged the margin down.

Okay. Okay. And then a couple of other things. Monica, did you -- if I missed it, did you give the -- your capital spending estimates for 2026?

No. I think as we are going into the acquisition of Del Monte Food, we prefer that we can postpone this to the next quarter. So we will have better idea.

Okay. And outside of Del Monte, anything unusual this year in terms of your capital purchases or relatively normal?

No, relatively normal, Mitch. It will be more or less in the same range of the past few years.

Okay. And then when you look at the Del Monte, the potential asset purchase here, is there -- I know we're not giving accretion and guidance along those lines. But can you talk a little bit about perhaps sales growth of that business, how -- the parts that you're purchasing, do you have any sort of idea like and expected sales growth? And also, as you look at margins, would this be something accretive to your current gross margin? I mean, just give us some idea of the profitability of the business? Or anything you can help add there would be helpful.

I know everybody is anxious to hear this, Mitch, but we'd rather wait until Q1 to really give some good guidance on how we feel about this business. As you understand this, this was a process through a bankruptcy court, and it's been -- we'd rather wait until Q1.

Okay. Well, that's fair enough. Does Mohammad, you talked about this has been a long held conviction of yours to get the Del Monte brand back together again. So as much as it's part of that, is the long-held conviction, is it because you see the opportunity to really drive some extended profit growth out of that? Is there something -- or is it just combining it just helps -- I don't know, just helps the story better? Or is there really a profit accelerator here that is driving your conviction?

Well, my conviction always is to make money. My conviction is not -- I love the word unifying the brand together. Of course, that's a great achievement and the legacy to bring back Del Monte under one roof. But at the end of the day, our shareholders will be looking for what this means to them, and that's what exactly what we are looking for. But I can assure you that our objective is how can we accelerate margins and accelerate profitability on both sides of the aisle.

And I just want to highlight one thing here, which is a fact that Del Monte will become the only multinational in the food industry that has 2 divisions, fresh and food. There is no other company equal to Del Monte in the future. That, I think, by itself is something that will not be easily repeated anywhere in the world. Don't forget that Fresh Del Monte as we are, we are a multinational across the world with everything on the map from production to supply chain to logistics to -- you name it. And now with the addition of the food, then we will become not only a consumer goods company, but we will be the only unique company in the world that will have fresh and packaged or processed or can in all aspects. So that, in my opinion, is a unique advantage and a unique position that Del Monte will enjoy going forward in the future.

I will turn the call back over to Mr. Mohammad Abu-Ghazaleh for closing remarks.

I would like to thank everyone for joining this call, and I wish you a great day and look forward to speaking with you on our next call. Thank you, and have a good day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

"

"

"

"

" Sturdivant & Co., Inc., Research Division

Good day, everyone, and welcome to Fresh Del Monte Produce's Third Quarter 2025 Earnings Conference Call. Today's conference call is being broadcast live over the Internet and is also being recorded for playback purposes. [Operator Instructions] For opening remarks and introductions, I would like to turn today's call over to the Vice President, Investor Relations with Fresh Del Monte Produce, Ms. Christine Cannella. Please go ahead, Ms. Cannella.

Thank you, Regina. Good day, everyone, and thank you for joining our third quarter 2025 conference call. Joining me in today's discussion are Mr. Mohammed Abu-Ghazaleh, Chairman and Chief Executive Officer; and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer. I hope that you have had a chance to review the press release that was issued earlier via Business Wire. You may also visit the company's IR website at investorrelations.freshdelmonte.com to access today's earnings materials and to register for future distribution.

This conference call is being webcast live on our website and will be available for replay after this call. Please note that our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website. I would like to remind you that much of the information we will be speaking to today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the federal securities laws.

In today's press release and in our SEC filings, we detail risks that may cause our future results to differ materially from these forward-looking statements. Our statements are as of today, October 29, 2025, and we have no obligation to update any forward-looking statements we may make. During the call, we will provide a business update along with an overview of our third quarter 2025 financial results, followed by a question-and-answer session. With that, I will turn today's call over to Mr. Mohammed Abu-Ghazaleh. Please go ahead.

Thank you, Christine, and thank you for joining us for our third quarter 2025 earnings call. We delivered another quarter of steady progress supported by strong execution across our portfolio. We saw continued gross margin expansion in our fresh and value-added product segment, and our pineapple program continues to perform well. Overall, our third quarter results affect our ongoing shift towards higher-margin value-added categories, a key driver of profitable growth.

We also took important steps this quarter to enhance long-term productivity and strengthen our financial performance. Most notably, we entered into an agreement to divest the operations of Mann Packing, a business that has not met our profitability expectations. We believe this divestiture will strengthen our overall margin profile and enhance capital efficiency going forward. While these decisions are never easy, they underscore our disciplined approach to managing performance and ensuring that every part of our business contributes meaningfully to our bottom line.

I would like to discuss a challenge facing the entire industry, the mounting pressure on global banana production, which I addressed last quarter and has since then only intensified. [Indiscernible] Tropical Race 4, which is known as TR4, was confirmed in Ecuador, one of the world's largest banana producers, making a serious escalation in Latin America after previous detections in Colombia, Peru and Venezuela. It is a highly contagious soil ball disease with no cure, and it's already destabilizing the region. In Peru, where TR4 was first detected in 2021, the impact is noticeable in the Pura region, the country's leading producer of organic bananas. A recent study found that 45% of farms are already infected and about 10% have been completely eradicated. Small growers are under mounting pressure as black sigatoka spreads and TR4 reaches new countries. With already thin margins across the sector, rising disease control costs are making survival increasingly difficult.

At Fresh Del Monte, we have been preparing for these challenges for years. We are advancing work on TR4-resistant banana varieties, an essential step toward long-term resilience, but solutions of that scale take time. In the meantime, growers, large and small, are taking every possible measure to control these diseases. Each year, these efforts are becoming more demanding as the situation further deteriorates, placing new financial strains on growers across the industry. We are seeing the impact clearly in Costa Rica.

As of August 25, production in the industry has declined 22% year-over-year, which is roughly 18 million boxes lost with most of that loss stemming directly from Black Sigatoka. For a country long recognized for its agricultural efficiency, that's a significant and concerning decline, one that inevitably drives costs higher across the industry. Demand for bananas remains strong. What's shifting is the balance between supply and demand and the underlying economics of the category. Understanding that shift is essential for everyone involved. Sustaining this category over the long term would require closer alignment across the value chain, ensuring that pressures in the fields are understood and shared throughout the supply chain. The farmer can no longer absorb these rising costs. It is easy to take the bananas for granted. Simple, familiar, always there. But behind that simplicity lies one of agriculture's most coordinated and collaborative supply chains. Protecting it is our shared responsibility. And if we don't act collectively to support growers and stabilize this supply chain, we risk seeing this fruit and the livelihoods behind it disappear before our eyes. That reality weighs heavily on me and drives much of our focus today. With that, I will turn it over to Monica Vicente, our CFO, to discuss our financial results.

Thank you, Mr. Abu-Ghazaleh, and good morning to everyone, and thank you for joining us today. Before reviewing our quarterly financials, I'd like to highlight several strategic actions we took during the quarter to strengthen our portfolio and drive long-term value. We took important decisions to streamline operations and reallocate capital towards higher-performing areas, which resulted in an impairment charge totaling $56 million. $18 million relates to the planned divestiture of Mann Packing, which Mr. Abu-Ghazaleh already mentioned. This supports our strategy to simplify operations and prioritize higher growth, higher-margin categories.

We acquired Mann Packing in 2018 and have now entered into an agreement to sell the business, including substantially all operating assets. The buyer, Church Brothers Farms, will acquire machinery and equipment and customer list for $19 million plus the value of inventory at closing. The transaction excludes certain real property, including our Gonzales, California facility, which we've agreed to lease for under a 5-year agreement with a renewal and purchase options. This divestiture is expected to close during the fourth quarter of 2025, subject to customary closing conditions. Mann Packing contributed $174 million in net sales during the first 9 months, but was a headwind to our strategic margin targets for the fresh and value-added products segment. We had previously pursued streamlining efforts. However, after further evaluation, we determined that a full divestiture better aligns with our long-term strategy.

During the quarter, we also recorded $37 million in impairment and other charges related to underperforming banana farms in the Philippines, which served our Asia and Middle East markets. Despite efforts to improve yields and manage costs, the farms continue to underperform, impacting profitability. After reassessing performance, we made the decision to abandon operations at these farms. This move enables us to reallocate resources to more productive supply channels.

Continuing with our broader efficiency efforts, we sold a break bulk shipping vessel from our fleet during the quarter and recently completed the sale of a second vessel. This reflects our continued shift away from legacy breakbulk vessels, and we remain committed to our vertically integrated logistics model and operate 6 modern vessels supporting our global supply chain. Let's now review our financial results for the third quarter of 2025, including adjusted results, which exclude the impact of the Mann Packing divestiture.

As Christine mentioned, reconciliations are available in today's press release and earnings presentation in our website. Net sales were $1.02billion-- $1.022 billion. The increase reflects higher net sales in our Banana and Other Product Services segments, primarily driven by higher per unit selling prices in our Banana segment. Contributing factors included the impact of tariff-related price adjustments in North America and the favorable impact of fluctuations in exchange rates related to the euro. The increase was partially offset by lower sales volume in our fresh-cut vegetable product line due to operational reductions taken during the fourth quarter of 2024. Adjusted net sales were $960 million. Gross profit was $81 million. The decrease was primarily driven by higher per unit production and procurement costs in the banana segment, along with increased distribution costs.

Gross margin decreased to 7.9%. Adjusted gross profit was $88 million and adjusted gross margin decreased to 9.2% -- despite margin compression, this quarter reflects the resilience of our core business strength and early progress from our shift toward higher-margin value-added categories. We expect margin recovery and improved efficiency ahead, supported by the Mann Packing divestiture and continued cost discipline. We reported an operating loss of $22 million, which reflects higher asset impairment and exit charges related to the underperforming banana farms in the Philippines and the impairment charges associated with divestiture of Mann Packing, along with lower gross profit in the current period.

On an adjusted basis, operating income was $40 million. Net loss attributable to Fresh Del Monte was $29 million, while on an adjusted basis, net income attributed to Fresh Del Monte was $33 million. Our diluted earnings per share was a loss of $0.61 and adjusted diluted earnings per share was income of $0.69. Adjusted EBITDA was $58 million. We expect adjusted EBITDA margin to improve due to continued gross margin momentum in our fresh and value-added products segment and disciplined cost management.

Let's take a closer look at the financial performance of our business segments, starting with our fresh and value-added products segment. Net sales were $611 million. The decrease was primarily due to lower per unit selling prices in our avocado product line, driven by increased industry supply and lower net sales in our fresh-cut vegetable product line following the operational reductions implemented during the fourth quarter of 2024 previously mentioned. Offsetting factors included higher sales volume and per unit selling prices in our fresh-cut fruit product line and increased per unit selling prices in our pineapple product line, along with tariff-related price adjustments in North America. Adjusted net sales were $548 million. Gross profit was $68 million. The increase was driven by higher per unit selling prices in the pineapple and fresh-cut fruit product lines. Gross margin increased to 11.2% and adjusted gross profit was $76 million with adjusted gross margin increased to 13.9%. We aim to sustain gross margins in the low to mid-teens for this segment, driven by continued improvements in our product mix within this segment.

Now moving to the banana reporting segment. Net sales were $358 million. The increase was driven by higher per unit selling prices across all regions, including the favorable impact of fluctuations in exchange rates, combined with the tariff-related price adjustments in North America and higher sales volume in the Middle East. These gains were partially offset by lower sales volume in Asia and North America, reflecting softness in market demand during the quarter. Gross profit was $5 million, and the decrease was driven by higher per unit production and procurement costs due to adverse weather conditions in our growing regions in the first half of this year, increased distribution costs, along with an allowance recorded on our receivable from an independent grower in Asia. Gross margin decreased to 1.3%. Adjusted gross profit was $4 million, and adjusted gross margin decreased to 1.2%.

Lastly, our Other Products and Services segment. Net sales were $53 million. The increase was a result of higher net sales in our third-party freight services business, partially offset by lower per unit selling prices in our poultry and meats business. Gross profit was $8 million. The decrease was due to lower net sales and higher production costs in our poultry and meats business. Gross margin decreased to 14.8%.

Now moving to selected financial results for the third quarter of 2025. Our income tax provision was $4 million. The decrease was primarily driven by lower earnings in certain higher tax jurisdictions. Net cash provided by operating activities was $234 million for the first 9 months. The increase was primarily due to working capital fluctuations, mainly lower accounts receivable driven by timing of collections and reduced finished goods inventory. At the end of the third quarter of 2025, our long-term debt stood at $173 million. Our adjusted leverage ratio remains well below 1x EBITDA. Capital expenditures for the first 9 months of 2025 totaled $36 million. Investments during the quarter focused on enhancing our banana and pineapple operations in Central America, upgrading operations and production facilities in North America, along with improving our pineapple operation in Kenya.

As announced in our press release, we declared a quarterly cash dividend of $0.30 per share payable on December 5, 2025, to shareholders of record as of November 12, 2025. On an annualized basis, this equates to $1.20 per share, representing a dividend yield of 3.4% based on our current share price. During the third quarter, we repurchased just over 200,000 shares of our common stock for $7 million at an average price of $35.55 per share. We still have $135 million available under our share repurchase program. Taken together, these actions reflect our commitment to delivering long-term value, supported by a strong sustainable dividend and a balanced capital allocation strategy that includes opportunistic share repurchases. With that, let's turn to the outlook for the remainder of the year and the strategic priorities.

We continue to expect net sales growth of approximately 2% year-over-year, consistent with our prior guidance. As far as gross margins by business segment, in our fresh and value-added products segment, excluding the impact of the divestiture of Mann Packing, gross margin is expected to be in the 11% to 13% range, primarily driven by strong performance in our pineapple product line and favorable product mix. While the divestiture of Mann Packing is scheduled to close on December 15, we expect to begin realizing the benefits of the streamlined portfolio in the fourth quarter of 2025 with a more pronounced impact on profitability and margin performance in 2026.

In our banana segment, gross margin is expected to compress below the historical 5% to 7% range, approaching 4% due to lower industry-wide supply and cost pressures from disease treatments as well as weather-related disruptions, which continue to cause shipping delays and port congestions. Both factors have significantly increased our costs. It's important to remember that with the banana segment, our focus remains on margin discipline over volume, and we continue to prioritize product quality and reliability for our customers even in the face of these extraordinary challenges. Bananas remain a foundational part of our product portfolio, essential for meeting customer expectations and supporting our broader commercial strategy, even if it's not a driver of growth.

For our Products and Services segment, gross margin is expected to be in the range of 10% to 12%, slightly below prior expectations. This reflects lower selling prices in our poultry and meats business, which are pressuring margins. Selling, general and administrative expenses are expected to be in the range of $205 million to $207 million.

Regarding CapEx, we now expect our full year spend to be in the range of $60 million to $70 million, down from $70 million to $80 million previously communicated. This reflects updated project time lines. Net cash provided by operating activities is expected to exceed the previously guided range of $180 million to $190 million, coming closer to $190 million to $200 million.

In closing, we continue to actively manage external pressures, including elevated operating costs and macroeconomic uncertainty. The strategic actions we've taken this year, streamlining our portfolio, reallocating capital and enhancing supply chain resilience position us to navigate the rest of the year with agility and focus. These actions reflect our commitment to disciplined execution and long-term value creation. This concludes our financial review. We can now turn the call over to Q&A. Regina?

[Operator Instructions] Our first question will come from the line of Mitch Pinheiro with Sturdivant & Company.

So I want to start out with a look at the fresh and value-added segment. So the adjusted gross margin was kind of eye-opening at 13.9%. And I know you're sort of guiding 11% to 13% as sort of your gross margin expectation. But is -- I guess is 13% the new normal for this business?

I think we're getting there, Mitch. I think we'll be getting very close to that margin consistently. So yes, you can see that the adjusted gross margin this quarter was very -- like you said, it's an eye-opening now that we've excluded mann. So we do expect to be very close to the 13%. We're still being cautious. We're doing the 11% to 13%, but we feel confident about this segment.

And so I haven't seen the Q yet, but I'm curious Pineapples, obviously, the supply has been down right now, but you're getting some pricing. Are your costs up in pineapples as well? Like you talked about the bananas and more cost for -- on the -- at the farm level. But is there -- and actually at the port shipping, but are pineapple margins still going to be your strongest of your -- in that segment?

Yes, that's a fact. And when it comes to cost, cost, the pineapple, thanks God, doesn't have the same diseases or same kind of plagues that is happening to the bananas. So we don't see increases in terms of applications of certain chemicals to our farms in the pineapple business. So pineapple does not definitely, there is inflation adjusted cost increases, which is normal on the labor side or other services. But all in all, it's a normal kind of environment. So we don't expect significant cost increases on pineapples. And you are right, I mean, the pineapple category is -- volumes are more or less static. And the demand is, in general, outstripping supply. So as we speak today, we don't have enough to allocate to every customer that we have. So it's more selective today than being in the past.

Yes, I've noticed you were obviously the leader in sort of innovation in pineapples and the marketing around it, but I'm also seeing some of your competitors start to -- like, I guess, do start to try to emulate some new product varieties. And I was wondering if it's essentially raising the value of the fruit with continued innovation and improved quality. Is that -- do you get the sense consumers notice that?

Well, yes, of course. I mean we yes, I mean the better -- the better fruit that you deliver to the market, the more ripe, the more higher sugar content, better sweetness or taste definitely have an influence on the consumption and the buyer kind of appetite to buy it. I mean there is no question that -- I think as Del Monte, we have been pioneer at the forefront of innovation and development. And I wish everybody else good luck with whatever they are doing. But I mean, Del Monte has a history of being the forefront into this. And I think that will remain in place.

And you still see from a supply point of view, when -- what's your best estimate for when you start to see demand supply recover?

I don't think that supply is going to -- as we go forward years ahead, there is not too much land left. I mean, in Costa Rica, we cannot double production, for instance. It's impossible or let's say, 20% or 30% more than what is happening right now. And Costa Rica is the major producing country in all Latin America. So -- and it's not easy to grow pineapples anywhere you want. Land is restricted. Environment as well concerns are part of this restrictions on additional acreage or additional production. So I believe consumption on a global level is going to increase. And we see that actually not only in North America, but we see that in Europe. We see that in the Middle East. We see that in Asia. It's a growing, let's say, commodity. It's becoming more fashionable for people to eat more pineapples and especially because of the good quality of these pineapples today.

So I can tell you, the Middle East, we are almost 100% -- almost 100% in the market. I mean -- and because of our proximity from Kenya into these markets, -- our Brazilian plantations are in progress right now. And what, 3 years from now, we will start having production out of Brazil, which will be the only company anywhere in the world that has production of ND2 gold pineapple in Brazil. So that will kick in. It may take some time, but I think that will be very significant for us going forward in the future. And we are looking at other areas of expanding pineapple as well as we speak. So I mean, in terms of our positioning in the pineapple, I'm very confident and comfortable actually with our pineapple business going forward in the future...

Okay. And then just two more questions on the fresh and value-added. Avocados, I know supply is strong and pricing has been down. Do you see that kind of reversing here in the next 6 months as you see pricing firming, I should say?

It could happen because actually, with Peru increasing volumes, with Colombia increasing volumes and other countries, Chile and California and the Mexicans did not have that opportunity. I mean if you look at the prices year-over-year, I think that period, we were talking about $70, $60, $70, $80 a box of avocado. -- now it's selling for almost half of that. So you can see the impact on the revenue itself. I mean, as a seller ourselves, of course, that would impact our revenue, selling the same volume for 80 or 70 or 60 rather than selling at 30 or 35, that makes a huge difference. But there could be maybe a pickup during the next 2-3 months because Mexico will be more or less exclusive in one way in terms of supply to North America. But I think it will not be a long-term kind of escalation in prices. I think that prices will remain more or less in the region that we are seeing right now between maybe $30 and $50, but not more.

And remember, Mitch, we buy the product from the grower. So we have the margin based on what we buy and sell. So even though the sale price is much lower, our cost is lower as well. So our margins have stayed pretty more or less even from last year. So unfortunately, it impacts our sales, but our margin is not impacted as much.

Yes. And then -- so -- but with pricing coming down, shouldn't that -- would you expect to see stronger volumes consumption?

Well, I don't see the prices of the retail to be really reflecting that adjusted.

Yes, I'm a big buyer of avocados, and I'm still paying the same...

Okay. And just switching gears to -- I did want to ask about how your fresh-cut fruit business is doing. I didn't see any comments around that.

They're doing -- yes, Freshcut is doing excellent as well. Like you know, we view that together with the pineapple as one of the primary products, and it performed very well during the quarter, and we expect to continue with a strong performance.

I don't remember if I mentioned earlier last year that we started fresh guacamole offering fresh guacamole in the market. And we started this new category, which is 100% fresh guacamole. And it was like -- we started from 0. And today, I think we will end at the end of this year with about $8 million in revenue on that category alone. So that tells you where our innovation is and where we are going. with reasonably good margins.

Yes. I just want to move on to the banana business. So pretty -- you laid out the issues pretty well from a category. What I was curious about was why banana volume or consumption in North America. I'm not sure what it is in Europe, but why consumption is down. I've asked before, we really don't know, I guess, but I was wondering if you have any recent insights as to banana consumption.

Well, it's seasonal, I would believe, Mitch, during the summer with all the summer fruits availability and people usually during the summer would go for more, let's say, like watermelon and melons and grapes and -- so I think it's not a trend. I think it's a hiccup. -- bananas more or less consumption-wise will be stable. I don't believe that we will see a huge drop into banana consumption in terms of consumer appetite. But my -- the problem is that the costs are going up and the prices are not moving in the same direction. So -- and that is the dilemma here. I mean -- and the diseases are not going away. The disease is continuing and spreading and intensifying as a matter of fact.

So if you remember a few years back, I said that we will see bananas at $20 a box. We are almost there. I mean, today, if you look at Ecuador, just the fruit alone is around $11 to $12 per box, just the fruit aside from all the other costs of packaging and services. So if you add up everything, you're talking about could be $16, $50, $60, $17 and even more per box. So we are talking about, I mean, substantial increases. And the most important thing, which people do not really focus on is the Sigatoka spread in Central America as well as, as I mentioned earlier, the TR for disease, which it's not if, it's when. It's just a matter of time when it's going to be spreading.

And we saw that in the Philippines and the write-off that we took in the Philippines and we saw yesterday, it was because of that. I mean we became -- I mean, the disease has -- no matter what you do, it's like a losing battle against that disease. I mean you can replant and then 3 years later, 4 years later, you lose 3 again. So this is really -- people don't understand and realize how serious this issue is. And this is going to happen, be it tomorrow or after a year or 2 or 3 is going to happen. It's going to come. And I can assure you that, that disease does not stop spreads. It's just a matter of time.

And Mitch, you see our margin for the banana suffered this quarter, and we're projecting closer to 4% for the year. The impact of the Sigatoka is very significant, not only because you have lower volume coming out of the ground, but the cost to protect the farms from Sigatoka is very high. So it's very obvious based on our results, the impact of these diseases.

So one thing -- bananas are obviously, I guess, the largest category of fruit, I guess, in the United States and maybe apples -- but certainly hugely important. And with all these added costs and the margins have always been kind of thin, you'd expect pricing to rise, but there's always been some element of irrationality among all the major players and in pricing, maybe you excluded, but my question is, I noticed that the 4 largest banana producers formed a new organization, VANA, you, Dole, Fs and the other one, whatever it a -- and then -- does that -- is this level of cooperation maybe a sign down the road that there's going to be a little more rationality to the quarter in banana pricing relative to the increase in costs and lower supply?

I don't think that association or that kind of gathering by the 4 banana companies was mainly to streamline the business better and nothing to do with actually influencing volumes or pricing in the market. It's rather than to understand the business better and trying to find solutions in terms of hopefully, agricultural practices and other logistical issues. But the point here, Mitch, people don't understand and don't get it that all of a sudden, one day, everybody will wake up and all of a sudden, there is not enough bananas to -- and we see that in other countries in the world. I mean, I see that in the Philippines. I saw that in Africa. All of a sudden, over years, the banana production is totally lost and/or 50%, 60% down on the previous -- I mean, on the normal trend. And this is going to happen.

I mean, we can see that actually as we speak right now in Ecuador. Ecuador is the largest producer of bananas in the world. And right now, you can see that the production is not picking up as it used to be. And that's an indication of what's going on in the industry. And people don't understand that. I've been all my life in this business. And I know and I can anticipate things. And I believe that there will come a time that there will be a huge drop in production. And as you can see, as a company ourselves, we are very careful. We are very stringent, and we are very -- we calculate our steps. I mean we're not here to lose money. I mean we are here to make money to our shareholders. And we will do whatever is necessary to streamline our business in the best way we can, be it on bananas or any other item.

And I think for bananas, in particular, there will come a time that people realize that there is not enough bananas in the market and the prices will shoot up in a way that will be a shock to the market. And that's the reality that if people really take this into consideration, it's better to really improve conditions for the growing side of bananas and supply side in order to maintain stability and continuity. But it's a short term, in my opinion, short-term vision and short-term kind of strategy that is happening right now.

It's just like Monica mentioned a few minutes ago, I mean, the chemical that we apply to Sigatoka, which is the black -- it turns the leaves into totally black and then we lose the bunches on the 3 the price of this product, the chemical, which is the only one in the world, you don't have a choice. You only have one product that you need to use. And that product has increased over the last 2 years by over 50%, 40%, 50% and still going up and you have no choice, either you spray and the problem that the disease is getting immunity. I mean, that disease, is becoming adapting to that chemical. So you need to apply more to try to prevent it or control it. It's a vicious circle. If you don't apply or if you don't apply enough, you will lose more fruit. But if you're going to apply more cycles into the field, that means more cost to you. So it's really -- I mean, if you look at our cost, it's about $1.30, $1.40 today per box just for this chemical alone applications. So I think that's the reality of the situation.

So one of the questions is about the Black Sigatoka. -- is one other mitigation effort can be fewer trees, more -- less canopy, more sunlight.

That is exactly what I said earlier, 18 million boxes down in Costa Rica production on a national level. That's mainly because of Sigatoka. It's not because of anything else, mainly because of Sicatoga. So if this happens in Ecuador, if this happens in Guatemala, if this happens in Panama, it's the same story.

Okay. And then just one other question in tariffs. across your entire portfolio, how much did tariffs add to the top line?

We haven't given that number, Mitch, but we were able to pass on the tariffs in North America, but we haven't given the number.

It's really minimal. It's not much. It's minimal.

[Operator Instructions] And that will conclude our question-and-answer session. I will now turn the call back over to Mr. Abu Ghazaleh for closing remarks.

Thank you, everyone. I appreciate joining us today and hope to talk to you in the next call. Have a good day.

That will conclude today's call. Thank you all for joining. You may now disconnect.