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Shares of produce company Calavo Growers (NASDAQ: CVGW) dropped on Wednesday after announcing it was selling a part of its business. The company also announced that the release of its quarterly financial results would be delayed, which was likely the weightier issue on investors' minds. As of 10 a.m. ET, Calavo Growers stock was down about 9%.

Too many questions right now

Calavo Growers was scheduled to release financial results for the fourth quarter of 2023 yesterday afternoon. However, an internal audit revealed that some of its operations in Mexico needed more review. Therefore, official financial results are delayed for now, although management says preliminary results show an 18% year-over-year drop in net sales.

Calavo Growers didnt reportQ4 results as expected, but it unexpectedly announced that it plans to sell its Fresh Cut business. Management says it already has a non-binding deal in place that's worth $100 million. If it goes through, it could be finalized in the second quarter of 2024.

With the uncertainty of Q4 results and the sudden change to the business, it seems the market wasn't happy with Calavo Growers stock today.

Management's trying to fix financials

Former CEO Lee Cole returned to Calavo Growers in March with a renewed emphasis on profitability. As the chart below shows, the company's earnings per share (EPS) has slipped in recent years.

Cole wants to return the company to a focus on avocados and guacamole rather than spend time on lower-margin opportunities. That's what's motivating the sale of its Fresh Cut business.

It seems like Cole is leading Calavo Growers to make sensible decisions. However, until Q4 results are reported, the market may be reluctant to respond positively to the stock. Larger financial problems can occasionally be uncovered after further investigation. So, it's understandable to wait for further clarity.

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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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