Mission Produce Reports Record Q1 Earnings Amid Industry Challenges
- Hardik Shah
- Mar 11
- 3 min read
TLDR
Revenue Growth: Total revenue surged 29% to $334.2M, driven by higher avocado prices (+25%) and increased blueberry sales.
Profitability Pressures: Adjusted EBITDA fell 8% to $17.7M, impacted by lower per-unit avocado margins due to Mexican supply issues.
Diversification Strategy Pays Off: Expansion in blueberries and mangoes helped offset industry supply volatility, reinforcing long-term growth potential.
Financial Results
Mission Produce (NASDAQ: AVO) is a global leader in avocado production and distribution, with additional offerings in blueberries and mangoes. The company operates a vertically integrated supply chain, sourcing from Peru, Mexico, California, and other regions, serving retail, wholesale, and foodservice customers across 25+ countries.
Mission Produce Earnings
Revenue: Increased 29% YoY to $334.2M, primarily due to higher avocado prices (+25%) and 5% growth in avocado volumes.
Net Income: $3.9M (EPS: $0.05 per diluted share) vs. break-even last year.
Adjusted Net Income: $7.1M (EPS: $0.10), up from $6.7M ($0.09).
Adjusted EBITDA: Declined 8% YoY to $17.7M, as avocado margin pressures offset gains in blueberries.
Gross Profit: Increased $2.8M to $31.5M, but margin declined 170 basis points to 9.4%, reflecting cost pressures.
“We were pleased to meet robust consumer demand despite supply challenges in Mexico. Our diversification across categories helped deliver solid results.” - Steve Barnard, CEO
Looking ahead, Q2 avocado volumes are expected to remain steady, with California and Peru offsetting a weaker Mexican harvest. Blueberry sales are projected to rise 35-40%, though pricing normalization may limit margin expansion.
Operational Performance
Industry & Market Trends
Macroeconomic Pressures: Inflationary headwinds remain, but avocados continue to see strong consumer demand, evidenced by higher prices.
Supply Chain Adjustments: Tariff uncertainties on Mexican imports could disrupt supply, but Mission's global sourcing strategy provides flexibility.
Key Business Milestones
Blueberry Expansion: 70% increase in volume sold, supported by new acreage and higher yields.
Mango Segment Growth: Early-stage development, but management sees potential for significant market expansion in North America.
Challenges & Risks
Mexican Supply Volatility: Weather-driven size reductions and harvest shortfalls forced Mission to rely more on spot market purchases, pressuring margins.
Tariff Uncertainty: While recent tariff threats did not disrupt operations, future policy changes remain a potential risk.
Strategic Initiatives
Mission Produce continues to invest in long-term growth through:
Geographic Expansion: Increasing avocado sourcing from Peru, Colombia, and Guatemala.
New Business Lines: Growing presence in mango and blueberry markets, leveraging its existing infrastructure.
Operational Efficiencies: Closing Canadian distribution centers to streamline costs and improve North American logistics.
Capital Allocation
CapEx: $14.8M in Q1, focused on Latin American farming investments and Guatemala packhouse construction.
FY25 Spending Outlook: Expected at $50M-$55M, with plans to moderate future capital investments.
Debt Management: Strengthening balance sheet remains a near-term priority, with free cash flow targeted for debt reduction.
The Bottom Line
Mission Produce delivered a strong Q1 performance, navigating Mexican supply constraints while benefiting from higher pricing and diversified operations. Despite EBITDA margin compression, the company's strategic expansion into blueberries and mangoes positions it for long-term, sustainable growth. Investors should watch for tariff developments and seasonal supply trends in the coming quarters.
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