Mission Produce Q3 Earnings Call Highlights

Key Points

• Mission Produce exceeded its Q3 adjusted EBITDA guidance, reporting $32.4 million on revenue of $450 million, up 26% year over year. Avocado volume rose 38% to approximately 253 million pounds, while average selling prices fell 9% due to higher industry supply.
• The company raised its annualized Calavo acquisition synergy target to more than $30 million, up from at least $25 million, with initial benefits expected in Q4 and larger contributions in fiscal 2027. Integration costs and higher acquisition-related debt nevertheless contributed to a $6.5 million net loss.
• Mission reaffirmed its second-half adjusted EBITDA outlook of $84 million to $88 million, supported by Peru’s larger avocado harvest, seasonal blueberry demand, a full quarter of Calavo operations and improving margins. Debt stood at approximately $400.3 million as of July 31.

Mission Produce NASDAQ: AVO reported fiscal third-quarter 2026 adjusted EBITDA of $32.4 million, exceeding the high end of its previously projected $28 million to $32 million range, as stronger-than-expected international farming results and post-acquisition contributions from Calavo supported performance.

Revenue for the quarter totaled $450 million, up 26% from the prior-year period. Avocado volume increased 38% year over year to approximately 253 million pounds, reflecting both the addition of Calavo and higher volume in Mission’s legacy business. Average avocado selling prices declined 9% from a year earlier amid higher industry supply.

The company posted a net loss attributable to Mission Produce of $6.5 million, or $0.08 per diluted share, including acquisition-related costs, purchase accounting effects and higher interest expense. Adjusted net income was $15 million, or $0.18 per diluted share, compared with $18.2 million, or $0.26 per diluted share, a year earlier.

Avocado Demand and Marketing Distribution

President and Chief Executive Officer John Pawlowski said U.S. retail avocado volume rose about 9% year over year during the quarter, even as the average retail price increased approximately 15% sequentially. U.S. per-capita avocado consumption was trending above 10 pounds year to date, up 12% from the prior year, while household penetration increased approximately 50 basis points.

Pawlowski said the company’s legacy business increased its estimated U.S. retail market share by about 60 basis points year over year. He said Mission is seeking to expand its category leadership while maintaining discipline on both volume and per-unit margins.

Marketing and distribution segment sales rose to $414.3 million from $344.1 million in the prior-year quarter. Segment adjusted EBITDA increased to $24.7 million from $20 million, primarily due to Calavo’s post-acquisition contribution. The company said a more balanced supply mix from Mexico, California and Peru improved per-unit margins sequentially from the second quarter.

Chief Financial Officer Bryan Giles said the segment benefited as California and Peru became more meaningful contributors to the company’s supply mix after delayed harvests had limited sourcing flexibility in the prior quarter.

Calavo Integration and Higher Synergy Target

The third quarter was Mission’s first reporting period following the Calavo acquisition. Management increased its estimate for annualized cost synergies from at least $25 million to more than $30 million, citing higher-than-anticipated selling, general and administrative savings and network efficiencies.

Pawlowski said the company has begun moving fruit through the combined network, reducing reliance on higher-cost external suppliers and improving inventory positioning. Mission also discontinued operations at Calavo’s Temecula facility and is pursuing initiatives involving distribution, freight, technology, procurement and organizational structure.

Management expects synergies to begin contributing in the fourth quarter and to build more meaningfully during fiscal 2027. During the quarter, Mission recorded $12.6 million in transaction, advisory and integration costs, including legal and advisory fees, severance and retention expenses, and other acquisition-related costs.

The company also recorded $5.2 million in acquired inventory step-up amortization, $1.5 million in acquired intangible amortization, and $6.1 million in financing, tax and supply-chain optimization expenses associated with the transaction and integration.

Prepared foods became a separate reportable segment following the acquisition. For the post-acquisition period included in the quarter, the segment generated $15.5 million in sales and $0.2 million in adjusted EBITDA. Giles cautioned that the partial-quarter results should not be treated as a full-quarter run rate.

Pawlowski said Mission’s near-term focus in prepared foods is maintaining customer service, improving operating consistency and throughput, and establishing a foundation for profitable growth. He also pointed to possible opportunities from the combined company’s sourcing network, customer relationships and existing manufacturing capacity.

Peru Production Expected to Support Fourth Quarter

International farming segment sales were $45.8 million, down from $49 million a year earlier, while adjusted EBITDA declined to $7.6 million from $12.1 million. The year-over-year decline reflected lower average avocado sales prices, though results exceeded management’s expectations because average sales returns were stronger than anticipated.

Mission expects exportable production from its owned Peru farms to reach 120 million to 130 million pounds for the harvest season, compared with 105 million pounds last season. About 53 million pounds had been sold through as of the end of the third quarter, and the company expects a larger share of this year’s crop to be sold in the fourth quarter.

During the question-and-answer session, Pawlowski said the harvest was nearly complete and that the company had visibility into the destinations and allocations for fruit expected to be distributed in the next several weeks. He cited the company’s expanded sales network in Europe, North America and South America as supporting confidence in moving remaining volume.

Blueberry sales increased to $5.4 million from $4.5 million a year earlier, while blueberry adjusted EBITDA was a loss of $0.1 million, compared with positive adjusted EBITDA of $0.5 million in the prior-year period. Management said most blueberry sales and profitability are concentrated in the fourth and first fiscal quarters.

Outlook, Debt and Capital Spending

Mission reaffirmed its fiscal second-half adjusted EBITDA outlook of $84 million to $88 million. With third-quarter adjusted EBITDA of $32.4 million, the company expects fourth-quarter adjusted EBITDA of $52 million to $55 million.

Management said the projected sequential increase is expected to be driven by sales from the Peru avocado crop, the seasonal blueberry ramp, a full quarter of Calavo operations, improved avocado margin dynamics and a small initial contribution from synergies.

Cash and cash equivalents totaled $47.1 million as of July 31, while long-term debt, including the current portion and net of debt issuance costs, was approximately $400.3 million. Interest expense rose to $5.1 million from $2.4 million a year earlier, primarily due to debt used to fund the acquisition.

Capital expenditures totaled $32 million through the first nine months of fiscal 2026, and Mission maintained its full-year capital spending expectation of about $45 million, including planned spending associated with the legacy Calavo business. The company also repurchased $9.4 million of common stock during the first nine months.

About Mission Produce (NASDAQ:AVO)

Mission Produce, Inc is a leading global supplier, packer and distributor of fresh avocados, serving retail, foodservice and industrial customers. The company manages a vertically integrated supply chain that spans sourcing, post-harvest handling, packing and ripening. Through proprietary ripening technologies and cold-chain logistics, Mission Produce delivers consistent quality and extended shelf life for its avocado offerings.

Founded in 1983 and headquartered in Oxnard, California, Mission Produce grew from a regional packing operation into a publicly traded company listed on the Nasdaq under the ticker AVO.

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