Steve Barnard says avocado specialist is “pleased” with first quarter results, achieved despite supply challenges in Mexico
Mission Produce has reported its financial results for the fiscal first quarter (Q1) ended 31 January 2025, with total revenue increasing 29 per cent year-on-year to US$334.2mn.
The increase was, the group said, primarily driven by the marketing and distribution segment, where average per-unit avocado selling prices increased 25 per cent on a 5 per cent increase in avocado volumes sold.
The higher selling prices reflected industry supply constraints in Mexico and demonstrated ”resilient consumer demand”.
Blueberry boost
Revenue in Mission’s blueberry segment also increased, primarily due to a 70 per cent rise in volume sold, partially offset by a 33 per cent decrease in average per-unit selling prices.
Higher blueberry volume was driven by increased total acreage and yields from Mission farms, it stated, while price decreases were driven by a normalisation of the supply and demand environment this year, compared to the prior year’s high pricing that was driven by lower supply following unfavourable regional weather conditions.
Gross profit increased US$2.8mn on the same period of 2024 to US$31.5 million, driven by the international farming segment.
This benefitted from increased packing and cooling service activity that correlated with higher blueberry production volumes, partially offset by lower gross profit in the marketing and distribution segment, which was negatively impacted by lower per-unit margins on avocados sold due to challenges in ”obtaining Mexican supply required to meet customer commitments”.
Net income was US$3.9mn compared to break-even, or US$0.00 per diluted share, for the same period last year.
Mission said growth was the result of lower interest rates on lower borrowings, increased equity income and other income associated with foreign currency transaction gains on a strengthening US dollar versus the prior-year period.
Adjusted net income was US$7.1mn, up from US$6.7mn last year, while adjusted EBITDA fell to US$17.7mn from US$19.2mn.
Meeting consumer demand
“We were pleased to meet robust consumer demand in our fiscal first quarter and deliver volume growth despite industry supply challenges in Mexico,” said Steve Barnard, CEO of Mission.
”Our marketing and distribution segment drove volume growth despite higher pricing, demonstrating the underlying strength of the category.
”Additionally, our strategic investments in our blueberries segment supported significant volume growth which led to solid segment EBITDA contribution,” he outlined.
”While the operating environment led to lower per-unit avocado margins this year due to higher fruit costs, our diversification across categories and markets helped us deliver solid bottom-line results against a tough year-ago comparison.
”Looking ahead, while the impact of tariffs on Mexican supply dynamics continues to be uncertain and fluid, we will focus on leveraging our competitive strengths in the California and Peruvian sourcing markets to deliver for our customers,” Barnard added.
”Combined with our strong balance sheet and disciplined approach to capital allocation, we believe we’re well-positioned to continue creating value for our shareholders.”
Outlook for Q2
Looking ahead, Mission offered an overview of factors that would drive performance, although it pointed out that the assumptions did not consider any influence of potential tariffs that the US administration and North American trading partners were considering.
Industry volumes in the fiscal 2025 second quarter were expected to be consistent with the prior year period, it said.
”Mexico volumes should taper off during the quarter as the industry harvest comes in lighter than initial expectations,” the group stated. ”However, California and Peruvian harvests should get off to a faster start based upon improved weather conditions, which should mitigate the impact on overall available volumes.”
At projected volume levels, pricing was expected to be higher on a year-over-year basis by approximately 5 per cent compared to the US$1.59 per-pound average experienced in the second quarter of fiscal 2024, indicative of ”continued strength in demand”.
Harvest timing of the company’s Peruvian blueberry season this year was similar to the prior year with approximately 20 per cent of the harvest to be sold through in the fiscal second quarter.
This should translate to an increase in volumes sold of approximately 35-40 per cent when applied to a larger total harvest from its farms for the 2024/2025 season, it noted.
Average sales prices were expected to decline sequentially but be consistent with prices experienced in the second quarter of fiscal 2024.
”For fiscal 2025, total capital expenditures are expected to remain in the range of US$50mn to US$55mn,” Mission concluded.
