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AVO Q3 Earnings Beat on Farming Strength and Calavo Contribution
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Key Takeaways
Mission Produce's Q3 revenues rose 25.8% as avocado volume jumped 37.7% on Calavo and legacy growth.
AVO's average avocado sales price fell 9.2% as elevated industry supply pressured pricing and margins.
Mission Produce sees Q4 adjusted EBITDA of $52M-$55M, aided by Peru sales, Calavo and blueberries.
Mission Produce Inc. (AVO - Free Report) posted third-quarter fiscal 2026 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Meanwhile, earnings declined while revenues increased year over year.
The company reported adjusted earnings of 16 cents per share compared with 24 cents in the year-ago quarter and surpassed the consensus estimate of 10 cents. The 60% beat came as results benefited from stronger-than-expected International Farming performance and encouraging contributions from Calavo.
Mission Produce, Inc. Price, Consensus and EPS Surprise
Revenues of $450 million rose 25.8% year over year and topped the $368 million consensus estimate by 22.3%. Avocado volume increased 37.7% to 252.7 million pounds, reflecting the Calavo acquisition and higher legacy Mission Produce volume.
Average avocado sales price declined 9.2% year over year to $1.58 per pound as elevated industry supply pressured pricing. Management said U.S. retail avocado volume grew about 9% year over year even as the average retail price increased about 15% sequentially.
U.S. avocado consumption remained above 10 pounds per capita year to date, up 12% from last year, while household penetration increased about 50 basis points. Legacy Mission Produce also increased its estimated U.S. retail market share by about 60 basis points year to date.
Gross profit was $44.7 million compared with $45.1 million a year ago. Gross margin fell 270 basis points to 9.9%, as lower International Farming pricing offset benefits from Calavo in Marketing & Distribution.
SG&A, excluding transaction advisory and integration costs, increased to $31.6 million from $24 million, mainly due to Calavo's cost structure. Transaction advisory and integration costs were $12.6 million, while acquired inventory step-up amortization totaled $5.2 million.
Adjusted EBITDA was $32.4 million versus $32.6 million last year and exceeded the high end of Mission Produce's prior $28 million to $32 million fiscal third-quarter guidance range. The outperformance reflected stronger-than-anticipated International Farming results and solid Calavo performance.
Avocado operating metrics: 191.5 million pounds sold (up 15% y/y) at an average sales price of $1.29 per pound (down 35.5% y/y from $2).
AVO’s Segment Mix Highlights
Marketing & Distribution sales increased 20.4% year over year to $414.3 million, helped by higher avocado volume. Segment adjusted EBITDA rose 23.5% to $24.7 million, primarily reflecting higher gross margin from Calavo's post-acquisition contribution.
Prepared Foods, now reported separately following the acquisition, generated $15.5 million in sales and $0.2 million in adjusted EBITDA for the post-acquisition period. Management noted that the results cover only part of the quarter and are not representative of a full-quarter run rate.
International Farming sales declined 6.5% year over year to $45.8 million, while segment adjusted EBITDA fell 37.2% to $7.6 million. Lower average avocado sales prices weighed on the comparison, though stronger-than-expected sales returns drove results above management's expectations.
Mission Produce expects 120 million to 130 million pounds of exportable avocado production from its owned Peru farms this season, up from 105 million pounds last year. About 53 million pounds had been sold through the end of the fiscal third quarter, leaving a greater concentration of sales for the fiscal fourth quarter.
Blueberries segment sales rose 20.0% to $5.4 million, while adjusted EBITDA was a loss of $0.1 million compared with an income of $0.5 million a year ago. Most blueberry sales and profitability are concentrated in the fourth and first quarters.
AVO’s Other Financials
Cash and cash equivalents were $47.1 million as of July 31, 2026, down from $64.8 million as of Oct. 31, 2025. Total long-term debt, including the current portion and net debt issuance costs, was about $400.3 million, while quarterly interest expense increased to $5.1 million from $2.4 million.
Net cash used in operating activities was $25.9 million for the first nine months, compared with $21.4 million of cash provided a year earlier. Capital expenditures totaled $32 million versus $39.8 million last year, and Mission Produce repurchased $9.4 million of common stock during the period.
AVO’s Near-Term Outlook
Mission Produce reaffirmed second-half fiscal 2026 adjusted EBITDA guidance of $84 million to $88 million. Management expects fiscal fourth-quarter adjusted EBITDA of $52 million to $55 million, supported by later Peru avocado sales, higher blueberry activity, a full quarter of Calavo and improved avocado margin dynamics.
For the fiscal fourth quarter, industry avocado volumes are expected to rise about 10% year over year, while pricing is projected to decline about 10% from the prior-year average of $1.39 per pound. Mission Produce also raised its annualized Calavo synergy target to more than $30 million from at least $25 million, with savings expected to begin contributing in the fiscal fourth quarter and build through fiscal 2027.
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AVO Q3 Earnings Beat on Farming Strength and Calavo Contribution
Key Takeaways
Mission Produce Inc. (AVO - Free Report) posted third-quarter fiscal 2026 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Meanwhile, earnings declined while revenues increased year over year.
The company reported adjusted earnings of 16 cents per share compared with 24 cents in the year-ago quarter and surpassed the consensus estimate of 10 cents. The 60% beat came as results benefited from stronger-than-expected International Farming performance and encouraging contributions from Calavo.
Mission Produce, Inc. Price, Consensus and EPS Surprise
Mission Produce, Inc. price-consensus-eps-surprise-chart | Mission Produce, Inc. Quote
Insight Into AVO’s Q3 Performance
Revenues of $450 million rose 25.8% year over year and topped the $368 million consensus estimate by 22.3%. Avocado volume increased 37.7% to 252.7 million pounds, reflecting the Calavo acquisition and higher legacy Mission Produce volume.
Average avocado sales price declined 9.2% year over year to $1.58 per pound as elevated industry supply pressured pricing. Management said U.S. retail avocado volume grew about 9% year over year even as the average retail price increased about 15% sequentially.
U.S. avocado consumption remained above 10 pounds per capita year to date, up 12% from last year, while household penetration increased about 50 basis points. Legacy Mission Produce also increased its estimated U.S. retail market share by about 60 basis points year to date.
Gross profit was $44.7 million compared with $45.1 million a year ago. Gross margin fell 270 basis points to 9.9%, as lower International Farming pricing offset benefits from Calavo in Marketing & Distribution.
SG&A, excluding transaction advisory and integration costs, increased to $31.6 million from $24 million, mainly due to Calavo's cost structure. Transaction advisory and integration costs were $12.6 million, while acquired inventory step-up amortization totaled $5.2 million.
Adjusted EBITDA was $32.4 million versus $32.6 million last year and exceeded the high end of Mission Produce's prior $28 million to $32 million fiscal third-quarter guidance range. The outperformance reflected stronger-than-anticipated International Farming results and solid Calavo performance.
Avocado operating metrics: 191.5 million pounds sold (up 15% y/y) at an average sales price of $1.29 per pound (down 35.5% y/y from $2).
AVO’s Segment Mix Highlights
Marketing & Distribution sales increased 20.4% year over year to $414.3 million, helped by higher avocado volume. Segment adjusted EBITDA rose 23.5% to $24.7 million, primarily reflecting higher gross margin from Calavo's post-acquisition contribution.
Prepared Foods, now reported separately following the acquisition, generated $15.5 million in sales and $0.2 million in adjusted EBITDA for the post-acquisition period. Management noted that the results cover only part of the quarter and are not representative of a full-quarter run rate.
International Farming sales declined 6.5% year over year to $45.8 million, while segment adjusted EBITDA fell 37.2% to $7.6 million. Lower average avocado sales prices weighed on the comparison, though stronger-than-expected sales returns drove results above management's expectations.
Mission Produce expects 120 million to 130 million pounds of exportable avocado production from its owned Peru farms this season, up from 105 million pounds last year. About 53 million pounds had been sold through the end of the fiscal third quarter, leaving a greater concentration of sales for the fiscal fourth quarter.
Blueberries segment sales rose 20.0% to $5.4 million, while adjusted EBITDA was a loss of $0.1 million compared with an income of $0.5 million a year ago. Most blueberry sales and profitability are concentrated in the fourth and first quarters.
AVO’s Other Financials
Cash and cash equivalents were $47.1 million as of July 31, 2026, down from $64.8 million as of Oct. 31, 2025. Total long-term debt, including the current portion and net debt issuance costs, was about $400.3 million, while quarterly interest expense increased to $5.1 million from $2.4 million.
Net cash used in operating activities was $25.9 million for the first nine months, compared with $21.4 million of cash provided a year earlier. Capital expenditures totaled $32 million versus $39.8 million last year, and Mission Produce repurchased $9.4 million of common stock during the period.
AVO’s Near-Term Outlook
Mission Produce reaffirmed second-half fiscal 2026 adjusted EBITDA guidance of $84 million to $88 million. Management expects fiscal fourth-quarter adjusted EBITDA of $52 million to $55 million, supported by later Peru avocado sales, higher blueberry activity, a full quarter of Calavo and improved avocado margin dynamics.
For the fiscal fourth quarter, industry avocado volumes are expected to rise about 10% year over year, while pricing is projected to decline about 10% from the prior-year average of $1.39 per pound. Mission Produce also raised its annualized Calavo synergy target to more than $30 million from at least $25 million, with savings expected to begin contributing in the fiscal fourth quarter and build through fiscal 2027.
Shares of this Zacks Rank #3 (Hold) company have gained 14.5% in the last three months compared with the industry’s growth of 10.4%.
Image Source: Zacks Investment Research
Stocks to Consider
The Chef’s Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. CHEF currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CHEF’s current fiscal-year sales and earnings indicates growth of 10.6% and 33.7%, respectively, from the year-ago reported figures. CHEF delivered a trailing four-quarter earnings surprise of 30.4%, on average.
Medifast, Inc. (MED - Free Report) , which is a leading manufacturer and distributor of clinically-proven healthy living products and programs, currently carries a Zacks Rank #2 (Buy). MED missed the average earnings surprise by a sharp margin in the trailing four quarters.
The Zacks Consensus Estimate for Medifast’s current financial-year sales indicates a decline of 27.3% from the year-ago number.
United Natural Foods (UNFI - Free Report) , which is the leading distributor of natural, organic and specialty food and non-food products, currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for United Natural Foods’ current financial-year sales indicates a drop of 2.1% from the prior-year level. UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.