Summary of Mission Produce, Inc. Q1 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $278.6 million, down 17% year-over-year, primarily due to a 30% decrease in avocado pricing.

Volume Growth: Avocado volumes increased by 14%.

Gross Profit: Consistent at $31.6 million; gross margin improved by 190 basis points to 11.3%.

Adjusted EBITDA: Increased by 5% to $18.5 million.

Adjusted Net Income: $7.3 million, or $0.10 per diluted share, consistent with the prior year.

SG&A Expenses: Increased by 31% to $29 million, driven by $7 million in transaction advisory costs related to the Calavo acquisition.

Cash and Cash Equivalents: $44.8 million, down from $64.8 million at the end of the previous quarter.

2Strategic Updates and Business Highlights

Leadership transition: John Pawlowski will become CEO, with Steve Barnard moving to Executive Chairman.

Strong operational execution despite pricing normalization; focus remains on volume and per-unit margins.

The pending acquisition of Calavo Growers is expected to enhance supply reliability and add prepared food capabilities, with expected annual cost synergies of at least $25 million.

The International Farming segment is being optimized for better year-round consumption, with efforts to improve pack house utilization in Peru.

Blueberry segment revenue grew by 12%, but profitability was impacted by lower yields from newer acreage.

3Forward Guidance and Outlook

Anticipated avocado industry volumes to increase by 10% to 15% in 2026, but pricing is expected to decline by 30% to 35%.

Q2 profitability is expected to be lower due to delayed California harvest and lower per-unit margins.

Consolidated adjusted EBITDA for Q2 is projected to be below the prior year’s levels.

Long-term capital allocation strategy will balance debt reduction, reinvestment, and shareholder returns.

4Bad News, Challenges, or Points of Concern

Significant revenue decline due to lower avocado pricing amid increased supply.

Higher SG&A expenses due to acquisition-related costs, which could pressure margins.

Q2 profitability challenges due to reliance on a single-source market (Mexico) and delayed California harvest.

Blueberry segment facing yield pressures, which may take 12 to 18 months to stabilize.

5Notable Q&A Insights

Management expressed confidence in the $25 million synergy estimate from the Calavo acquisition, with potential for further upside.

Fixed costs are primarily variable, making it challenging to maintain margins in a low-price environment.

Blueberry yields are expected to improve as new acreage matures, with a timeline of 12 to 18 months for reaching full productivity.

The company is committed to a balanced capital allocation strategy, prioritizing debt management while also considering shareholder returns. Overall, Mission Produce, Inc. demonstrated resilience in a challenging pricing environment, with a strong focus on volume growth and strategic acquisitions to enhance future growth potential. However, near-term challenges related to pricing and operational dynamics may impact profitability.