SunOpta Earnings: Double-Digit Growth Fueled by Volume and Fruit Snack Expansion
- Hardik Shah
- Aug 6
- 3 min read
TLDR
• Revenue Strength:13% YoY growth to $191.5M, entirely volume-driven across all categories and channels.
• Margin Trends:Adjusted gross margin hit 15.2%, tempered by tariff pass-through timing; sequential improvements remain on track.
• Forward Outlook:Raised FY25 revenue guidance to $805–$815M; reaffirmed adjusted EBITDA outlook of $99–$103M and 2.5x year-end leverage target.
Business Overview
SunOpta Inc. is a leading manufacturer of plant-based and fruit-based food and beverage products, focused on the “better-for-you” consumer trend. The company’s portfolio includes:
Plant-Based Beverages (e.g., oat, almond milks, and broths)
Better-For-You Fruit Snacks (20% of total revenue and growing)
Protein and Health Shakes
Its diversified customer base spans retail, foodservice, and club channels in North America. SunOpta operates with a global supply chain and is headquartered in Eden Prairie, Minnesota.
Sunopta Earnings A2'25
Revenue: $191.5M, up 13% YoY
Driven entirely by 14% volume growth, outpacing category peers
Profitability:
Gross profit: $28.4M (up 34%)
Gross margin: 14.8% (reported), 15.2% (adjusted)
Adjusted gross margin dipped 80 bps YoY due to timing of tariff pass-throughs and investments in labor/infrastructure
Adjusted EBITDA: $22.7M, up 14%
Adjusted EPS: $0.04, doubling from $0.02 YoY
Net income from continuing operations: $4.4M vs. ($4.4M) loss YoY
Cash Flow & Leverage:
Operating cash flow (YTD): $17.8M
Net leverage improved to 2.9x, on pace for 2.5x year-end target
"We did what we said we would do: growing revenue, growing adjusted EBITDA, improving gross margins, and allocating capital with discipline to drive ROIC." – Brian Kocher, CEO
Forward Guidance
Revenue guidance raised to $805M–$815M (+11% to 13% YoY)
Adjusted EBITDA reaffirmed at $99M–$103M (+12% to 16% YoY)
Free cash flow: $25M–$30M
Capex: $30M–$35M, mainly for maintenance and growth projects
Interest expense: $24M–$26M
Risks & Opportunities:
Tariffs: Pass-through pricing fully implemented by mid-July, but lag from revised August 1 tariffs may impact Q3
Supply constraints: Fruit snack demand continues to exceed capacity
Operational Performance
Volume growth across every product, customer segment, and channel
Beverage & broth production: +16%
Fruit snacks production: +22%
Club channel sales: Up over 25%
Foodservice growth: Mid-single digits, led by oat-based beverages
Top 10 customers: All posted growth in H1 2025
Segment Performance Snapshot:
Fruit Snacks: 20th consecutive quarter of double-digit growth
Plant-Based Beverages & Broth: Strong YoY production increases
Gross Margin Expansion: 1/3rd of targeted 300 bps improvement already realized
"Every one of our customers accepted some form of tariff upcharge, and we are billing them now. These upcharges will remain in place until we’ve recovered any timing differences—even if tariffs are later reduced or eliminated." – Brian Kocher, CEO
Market Insights
Better-for-you categories remain resilient amidst macro headwinds
Fruit snacks category: SunOpta outpacing supply, leading to 25% additional capacity investment
Club and value channels: Seeing strong consumer pull
Customers: Embracing pass-through pricing, even in tariff-reduction scenarios
Consumer Behavior & Sentiment
Consumers prioritize value + health, boosting demand for club and private label channels
Loyalty remains strong in SunOpta’s categories
Fruit snacks success attributed to simple ingredients and real-fruit positioning
Strategic Initiatives
New Fruit Snacks Line: $25M investment, online by late 2026, already oversubscribed
Operational Excellence: Continued asset productivity unlock and gross margin expansion
Long-Term Algorithm:
Revenue growth: 8–10%
Adjusted EBITDA growth: 13–17%
ROIC target: 16–18% by 2026
"The new fruit snack capacity is already oversubscribed—demand is outpacing supply, and we’re building ahead of the curve." – Greg Gabba, CFO
Capital Allocation
Deleveraging: Targeting 2.5x net leverage by FY25
Growth Investments: Minimal growth capex needed through 2026; investing in fruit snacks line
Share Repurchases: $1M deployed in Q2 to buy back 163K shares; $24M remains under authorization
The Bottom Line
SunOpta continues to outperform its peers in the food and beverage space with consistent double-digit growth, disciplined capital deployment, and rising profitability. With tariff recovery underway, structural tailwinds in “better-for-you” snacking, and a highly oversubscribed capacity expansion in fruit snacks, the company is well-positioned to execute on its long-term algorithm. Investors should watch for Q3 margin performance as a key inflection point.
--
Comments