AVO — Mission Produce, Inc.

Summary of Mission Produce Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenue: $290.9 million, down 24% year-over-year, primarily due to a 36% decrease in per unit avocado sales prices.
• Volume Growth: 15% increase in avocado volume sold year-over-year.
• Gross Profit: $20.5 million, down from $28.4 million in the prior year, with a gross margin of 7%, a decrease of 50 basis points.
• Adjusted Net Income: $800,000 ($0.01 per diluted share), down from $8.7 million ($0.12 per diluted share) in the prior year.
• Adjusted EBITDA: $7.1 million, down from $19.1 million year-over-year.
• Cash and Cash Equivalents: $33 million as of April 30, 2026.
• Capital Expenditures: $22.9 million for the first half of fiscal 2026.

2. Strategic Updates and Business Highlights

• Leadership Transition: John Pawlowski has officially taken over as CEO, with Steve moving to executive chairman.
• Calavo Acquisition: Closed on May 28, 2026, expected to enhance operational capacity and customer service. Anticipated annualized cost synergies of at least $25 million within 18 months.
• Market Dynamics: High supply from Mexico led to a temporary imbalance in avocado pricing, but the company maintains strong customer relationships and expects margins to recover.
• Consumer Trends: U.S. avocado consumption reached new highs, with over 1.6 million new households entering the category, indicating strong long-term growth potential.

3. Forward Guidance and Outlook

• Q3 2026 Guidance: Adjusted EBITDA expected between $28 million and $32 million, driven by higher avocado volumes and the partial contribution from Calavo.
• Full Year Outlook: Anticipated consolidated second half adjusted EBITDA between $84 million and $88 million, with expectations for improved margins and contributions from the Peruvian harvest.
• CapEx Plans: Projected capital expenditures of approximately $45 million for the fiscal year.

4. Bad News, Challenges, or Points of Concern

• Margin Compression: Experienced significant margin pressure due to low avocado prices and a mismatch in supply and demand for fruit sizes, particularly in April.
• Declining Metrics: Notable year-over-year declines in revenue, gross profit, and adjusted EBITDA raise concerns about profitability in the current pricing environment.
• Weather Risks: Potential impacts from the El Niño weather pattern could affect future avocado production, particularly in Mexico and the upcoming 2027 crop cycle.

5. Notable Q&A Insights

• Q3 to Q4 Transition: Management expects a significant step-up in adjusted EBITDA from Q3 to Q4, driven by improved pricing and volume dynamics.
• Prepared Foods Segment: The prepared foods business offers a different margin profile and is expected to contribute positively to overall EBITDA, but specific details will be provided in future updates.
• Customer Retention: Over 50% of new households entering the avocado category are expected to remain long-term, indicating strong market potential.
• Integration Focus: Immediate efforts post-Calavo acquisition are centered on minimizing disruption and optimizing cost structures.

Overall, while Q2 2026 presented challenges due to pricing pressures and margin compression, Mission Produce remains optimistic about future growth driven by strategic acquisitions, strong consumer demand, and operational improvements.