Mission Produce Q4 Fiscal 2025: International Farming Surges 97%, Earnings Handily Exceed Expectations

Mission Produce, Inc. AVO delivered stronger-than-expected profitability in the fourth quarter of fiscal 2025, with adjusted earnings per share of 31 cents significantly outpacing the Zacks Consensus Estimate of 19 cents—a 10.7% year-over-year improvement from 28 cents in the prior-year quarter. Despite a 10% revenue decline to $319 million against last year’s $354 million, the company’s top-line results still exceeded the consensus projection of $312.3 million. The stock, rated Zacks Rank #3 (Hold), has climbed 4.7% over the past three months, outperforming an industry decline of 7.7%.

Segment Breakdown: Where Growth Is Coming From

International Farming Leads the Charge

The International Farming segment emerged as a standout performer, with sales skyrocketing 97% year over year to $59.6 million. This exceptional growth reflects higher yields from owned avocado orchards coupled with expanded third-party packing and cooling service revenue. Adjusted EBITDA for the segment surged 211% year over year to $8.4 million, while operating income swung from a $2.5 million loss to a $2.1 million gain—a $4.7 million positive turnaround.

Blueberries Division Shows Mixed Results

The Blueberries segment, particularly supported by Peru’s productive operations, registered net sales growth of 16% year over year to $36.5 million, driven by higher volumes. However, adjusted EBITDA contracted to $4.7 million from $8.6 million year-ago, and operating income fell to $4.9 million from $11.6 million, reflecting margin pressures despite stronger top-line performance. The Peru-based blueberry harvest is expected to peak in the coming fiscal quarter, with new acreage contributing to volume growth alongside relatively stable pricing dynamics.

Marketing and Distribution: Pricing Headwinds Offset Volume Gains

Marketing and Distribution net sales declined 15% year over year to $271.9 million, primarily due to a 27% drop in average per-unit avocado prices, partially mitigated by a 13% increase in avocado volumes. Notably, the segment’s adjusted EBITDA rose 11% to $2.7 million, and operating income grew 9%, demonstrating improved operational leverage despite challenging pricing dynamics.

Profitability and Margin Dynamics

Gross profit reached $55.7 million with a gross margin of 17.5%, representing a 180 basis point improvement year over year. The margin expansion paradoxically stems from lower revenue and reduced per-unit pricing; since the Marketing and Distribution segment operates on a per-unit economics model, the pricing decline actually improved reported margins. Selling, general and administrative expenses rose 2% year over year to $27.7 million, driven by elevated operational costs, performance-based stock compensation, and increased statutory profit-sharing obligations from Peru and Mexico operations.

Adjusted EBITDA increased 12% year over year to $41.4 million from $36.9 million, buoyed by higher avocado production in the International Farming business and increased avocado volumes throughout the distribution channel.

Financial Position and Capital Allocation

Mission Produce ended the quarter with $64.8 million in cash and equivalents, $92.8 million in long-term debt (excluding current portions), and $587.3 million in shareholders’ equity. Operating cash flow for fiscal 2025 totaled $88.6 million. Capital expenditure reached $51.4 million for the full year, allocated toward avocado orchard development, pre-production land maintenance, packhouse facilities in Guatemala, and blueberry cultivation expansion in Peru.

Outlook: Navigating Volume Gains Against Pricing Pressure

Looking ahead to the first quarter of fiscal 2026, Management projects a 10% year-over-year increase in avocado volumes supported by a larger Mexican harvest, though this expansion will be offset by an anticipated 25% price decline due to elevated supply. The blueberry segment is positioned for seasonal strength as Peru’s harvest peaks, with new acreage contributing to volume gains; pricing is expected to remain flat to slightly higher, though lower yields in certain areas may create cost headwinds. The company has guided fiscal 2026 capital expenditure at $40 million.