You are Lucía Arenas-Beltrán, chief executive of Helio Verde, a New York-listed food company run from Costa Rica. Tomorrow at 8:30 a.m. you present third-quarter results to twelve analysts, and one of them has already told you, in writing, the question he will ask.
The situation
The quarter has two faces. Organic revenue grew 4.2% against the 7.0% the market expected: a miss of 280 basis points. Gross margin, on the other hand, rose 90 basis points. You are cutting the full-year revenue guide from 7.5–8.5% to 5.5–6.0% and raising the margin guide by 50 basis points. By the company's own analysis, about 100 points of the miss come from softer demand in Panama and Guatemala, and about 180 from the channel change and product pruning you decided yourself, which took US$14 million of low-margin volume out before the new capacity at the Cartago plant is ready.
Last Friday you ratified the dismissal for cause of Carlos Vega Hernández, general manager for Central America North for seven of his nineteen years with the company. You did not run the investigation: Beatriz Solís, your head of human resources, did. A two-paragraph internal note went out on Monday. On Wednesday a financial wire service ran the departure beside the date of the results.
That same morning Christopher Wen, an analyst at Greycap, wrote to your head of investor relations, Sofía Carballo. He was not asking for a comment but for a yes or a no: does the departure relate to financial irregularities, internal-control weakness or compliance issues that may explain the quarter? "If not now, on the call."
The call is the first of three rooms. On Thursday you speak to your 200 senior leaders; the Thursday after, to all 15,000 employees. Each audience will know within days what you told the other two. Your team has left several draft answers on the table.