Core Viewpoint - Mission Produce, Inc. will release its financial results for the fiscal second quarter ended April 30, 2024, on June 6, 2024, after market close, followed by a conference call to discuss the results [1]. Company Overview - Mission Produce is a global leader in sourcing, producing, and distributing fresh Hass avocados, with additional offerings in mangos and blueberries [3]. - The company has been in operation since 1983 and services retail, wholesale, and foodservice customers in over 25 countries [3]. - Mission Produce operates four state-of-the-art packing facilities in California, Mexico, and Peru, and has sourcing capabilities in various countries including Chile, Colombia, and the Dominican Republic [3]. - The company maintains a global distribution network with strategically positioned forward distribution centers across North America, China, Europe, and the UK, providing value-added services such as ripening, bagging, custom packing, and logistical management [3]. Conference Call Details - The conference call can be accessed live by dialing (877) 407-9039 for domestic callers and (201) 689-8470 for international callers [2]. - A replay of the call will be available until June 20, 2024, with specific dialing instructions for both domestic and international callers [2]. - The live audio webcast will be accessible on the Company's Investor Relations website, with an archived replay available shortly after the live event [2].

Core Viewpoint - The article discusses the potential profitability of vegan stocks, highlighting that sustainable practices may not necessarily lead to profitability sacrifices, especially as consumer preferences shift towards sustainability driven by Generation Z [1][2]. Group 1: Environmental Impact of Vegan Diets - Research indicates that vegan diets result in 75% less climate-heating emissions, 66% less destruction of wildlife, 54% less water use, and reduced water pollution compared to diets with over 100g of meat daily [1]. Group 2: Consumer Trends - Generation Z is increasingly embracing sustainability, influencing broader consumer behavior towards green-friendly initiatives, which could positively impact the sustainability ecosystem [1][2]. Group 3: Company Analysis - Kroger (KR) - Kroger is a major player in the grocery industry, offering an in-store brand called Simple Truth that focuses on organic and natural products, including plant-based meat [3]. - Kroger's projected sales for fiscal 2026 are $151.36 billion, showing modest growth compared to its trailing-12-month revenue of $150.04 billion [4]. - The company offers a forward dividend yield of 2.16%, making it a stable investment option [4]. Group 4: Company Analysis - Mission Produce (AVO) - Mission Produce specializes in the sourcing, farming, packaging, marketing, and distribution of avocados, mangoes, and blueberries, serving various markets [6]. - The company reported a positive earnings surprise of 250% for the three months ended January 31, 2024, with earnings per share of 9 cents against an anticipated loss [6][7]. - For fiscal 2024, analysts project earnings per share of 29 cents on sales of $969.17 million, up from 19 cents EPS and $953.9 million in sales the previous year [7]. Group 5: Company Analysis - Calavo Growers (CVGW) - Calavo Growers markets and distributes avocados and other perishable foods, positioning itself well amid trends towards healthier food options [8]. - Analysts rate Calavo shares as a moderate buy with an average price target of $35.50, indicating nearly 33% growth potential [9]. - Despite a net loss of $10.21 million on revenue of $966.79 million during the trailing-12-month period, projections for fiscal 2025 suggest a potential earnings per share of $1.55, indicating a significant improvement [9].

Group 1: Stocks with Strong Earnings Estimates - Marathon Petroleum (MPC) has seen a 35.8% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Harmony Gold (HMY) has experienced a 30.6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Mission Produce (AVO) has recorded a 25.0% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] Group 2: Additional Stocks with Earnings Growth - DXP Enterprises (DXPE) has seen a 13.0% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Itron (ITRI) has experienced a 10.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2]

Core Insights - The rise of veganism is driving demand for plant-based food products, leading to growth opportunities for companies in this sector [1] Group 1: Beyond Meat (BYND) - Beyond Meat is the largest producer of meat-substitute products, with availability in 191,000 retail and food service outlets across over 80 countries [2] - The company experienced a revenue boom before COVID-19 but has struggled to regain its previous heights, with stock dipping below profit margins [2] - Significant investments in research and development have led to the launch of the fourth generation of Beyond Burger, which is expected to drive future revenue [3] Group 2: Local Bounti (LOCL) - Local Bounti is an agricultural tech company focused on sustainable farming, utilizing a patented "stack and flow" system that uses 90% less water and land compared to conventional methods [4] - The company reported a 22% revenue increase and a 50% rise in production volume from its Georgia facility in Q1 2023 [4][5] - Local Bounti secured $228 million in financing for new projects and plans to expand its shipping network in Q2, positioning it for future growth [5] Group 3: Mission Produce (AVO) - Mission Produce is a leading supplier of avocados, with over 14,000 acres globally, benefiting from the popularity of avocados in vegan diets [6] - The company has rebounded from COVID-19 impacts, reporting a 21% revenue increase and an adjusted net income of $6.7 million in Q1 2023 [7] - Rising avocado prices are expected to positively impact Mission Produce's performance in the upcoming quarters [7]

Financial Data and Key Metrics Changes - Total revenue for Q1 2024 increased by $45.2 million or 21% year-over-year to $258.7 million, with adjusted EBITDA rising by $16.9 million to $19.2 million [5][15][18] - Gross profit increased by $19.7 million to $28.7 million, with gross profit margin expanding by 690 basis points to 11.1% of revenue [16][18] - Net income for Q1 2024 was breakeven at $0.00 per diluted share, compared to a net loss of $8.8 million or $0.12 per diluted share for the same period last year [18] Business Line Data and Key Metrics Changes - Marketing and Distribution segment net sales increased by 24% to $224.6 million, with adjusted EBITDA rising by $6.4 million to $11 million [19] - International Farming segment revenues were approximately flat at $5.8 million, with adjusted EBITDA improving by $1.3 million to a negative $0.5 million [20] - Blueberry segment net sales increased by 9% to $32.5 million, with adjusted EBITDA rising by $9.2 million to $8.7 million, driven by a 90% increase in selling prices despite a 43% decrease in volume sold [21] Market Data and Key Metrics Changes - The company is focusing on emerging growth markets such as Europe and Asia, with a new distribution center in the UK progressing as planned [8][10] - Mango revenue grew nearly 50% year-over-year to over $10 million, indicating strong market potential [8] Company Strategy and Development Direction - The primary goal is to drive long-term volume growth by ensuring consistent supply and increasing per capita consumption [8] - The company is investing in new premium varietals in the blueberry segment to enhance yield and differentiate its offerings [6][7] - The strategy includes optimizing operations in the International Farming segment to reduce costs while maintaining quality standards [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming Peruvian avocado harvest, citing improved weather conditions and expected better pricing due to supply and demand dynamics [32] - The company anticipates that the lower cost structure will lead to strong pricing in the second half of the fiscal year [37] - Management highlighted the potential for growth in the mango and blueberry segments, with expectations for continued revenue growth [41][42] Other Important Information - The company announced the appointment of John Pawlowski as President and Chief Operating Officer, expected to enhance operational strategies [13] - Capital expenditures for Q1 2024 were $9.9 million, down from $17.6 million the previous year, reflecting a tapering off of heavy investment cycles [24] Q&A Session Summary Question: Balance between market share and margins in marketing business - Management discussed the importance of maintaining a supply-demand balance and tightening pricing commitments to manage risks [28][29] Question: Outlook for Peru operations and crop performance - Management expressed optimism about the crop size and pricing, expecting better performance compared to the previous year [31][32] Question: Details on cost enhancements and pricing - Management explained cost reductions in Peru operations and the implementation of a zero-based budget approach to improve efficiency [35][36] Question: Growth potential for blueberries and mangoes - Management highlighted the growing consumption of both fruits and the benefits of leveraging distribution networks for operational synergies [39][41]

Financial Performance - Net sales increased by $45.2 million or 21% to $258.7 million for the three months ended January 31, 2024, compared to $213.5 million in the same period last year[75]. - Gross profit rose by $19.7 million or 219% to $28.7 million, with gross profit percentage increasing to 11.1% from 4.2% year-over-year[79]. - Net income for the company was $2.0 million for the three months ended January 31, 2024, compared to a net loss of $10.6 million in the same period last year[101]. - Total adjusted EBITDA for the company was $19.2 million for the three months ended January 31, 2024, compared to $2.3 million in the same period last year[96]. - Net cash provided by operating activities was $9.5 million for the three months ended January 31, 2024, compared to cash used of $1.3 million in the same period last year[101]. Segment Performance - Marketing and Distribution segment net sales increased by $42.8 million or 23.6% to $224.6 million, driven by higher average per-unit avocado sales prices[75]. - Net sales in the Marketing and Distribution segment increased by $42.8 million or 24% for the three months ended January 31, 2024, compared to the same period last year, driven by avocado pricing increases[97]. - Adjusted EBITDA for the Marketing and Distribution segment increased by $6.4 million or 139% in the same period, primarily due to improved per-unit gross margin on avocados sold[97]. - Total segment sales in the International Farming segment were flat for the three months ended January 31, 2024, compared to the same period last year[98]. - Adjusted EBITDA for the International Farming segment increased by $1.3 million or 72% in the same period, driven by cost savings measures[98]. - Net sales in the Blueberries segment increased by $2.7 million or 9% for the three months ended January 31, 2024, primarily due to price and volume dynamics[98]. - Blueberry revenue increased by $2.7 million or 9%, primarily due to a 90% increase in average per-unit sales price, despite a 43% decrease in volume sold[75]. Expenses and Liabilities - Selling, general and administrative expenses rose by $1.6 million or 8% to $20.7 million, mainly due to higher employee-related costs[81]. - Interest expense increased by $0.9 million or 38% to $3.3 million, primarily due to rising SOFR rates[83]. - Equity method income decreased by $0.6 million or 60% to $0.4 million, primarily due to weak results at Mr. Avocado[86]. - Other expense, net increased by $0.2 million or 25% to $1.0 million, driven by foreign currency transaction losses[88]. - Provision for income taxes was $2.1 million, compared to a benefit of $1.7 million in the same period last year, with an effective tax rate of 51.2%[91]. Capital Expenditures and Financial Position - The company reported capital expenditures of $9.9 million for the three months ended January 31, 2024, down from $17.6 million in the same period last year[102]. - For fiscal 2024, capital expenditures are expected to be between $30 million to $35 million[111]. - The Moruga Blueberry Project involves farming approximately 1,500 additional acres of blueberries in Peru, with estimated remaining capital expenditures of approximately $35 million as of January 31, 2024[112]. - The company has a total borrowing capacity of $250 million under its syndicated credit facility with Bank of America[109]. - As of January 31, 2024, the consolidated leverage ratio was 2.43 to 1.00, and the fixed charge coverage ratio was 1.96 to 1.00, indicating compliance with financial covenants[110]. - The company's undiscounted cash liabilities related to leases were approximately $177.2 million, with $109.0 million for long-term land leases in the International Farming and Blueberries segments[112]. - Remaining maturities on term loans and notes were $156.5 million as of January 31, 2024[112]. Market Conditions and Risks - The company continues to face fluctuations in supply and demand, impacting net sales and gross profit margins[70]. - There have been no material changes to critical accounting estimates since the Annual Report on Form 10-K for the year ended October 31, 2023[113]. - No material changes were reported in the quantitative and qualitative disclosures about market risk in the Annual Report on Form 10-K for the year ended October 31, 2023[114].

Financial Performance - Total revenue for Q1 2024 increased 21% to $258.7 million, driven by a 23% increase in average per-unit avocado selling prices[3] - Adjusted net income for Q1 2024 was $6.7 million, or $0.09 per diluted share, compared to an adjusted net loss of $(5.0) million, or $(0.07) per diluted share, in the prior year[7] - Adjusted EBITDA for Q1 2024 was $19.2 million, an increase of $16.9 million compared to $2.3 million in the prior year period[7] - Net sales for the three months ended January 31, 2024, increased to $258.7 million, up 21.1% from $213.5 million in the same period of 2023[27] - Gross profit for the same period was $28.7 million, compared to $9.0 million in the prior year, representing a significant improvement[27] - Operating income turned positive at $8.0 million, compared to an operating loss of $10.1 million in the previous year[27] - The company reported net income of $2.0 million for the three months ended January 31, 2024, compared to a net loss of $10.6 million in the same period last year[27] - The company experienced a net loss attributable to Mission Produce of $8.8 million for the quarter, compared to a loss of $10.6 million in the previous year[32] Sales and Pricing - Marketing & Distribution segment net sales increased 24% to $224.6 million, primarily due to a 23% increase in average per-unit avocado sales prices[8] - Blueberries segment net sales increased 9% to $32.5 million, driven by a 90% increase in average per-unit sales price, despite a 43% decrease in volume sold[9] - Avocado sales accounted for $212.3 million, compared to $174.0 million in the prior year, reflecting a year-over-year increase of about 22%[36] - The average sales price per pound of avocados rose to $1.40, up from $1.14 in the same quarter last year[35] - For Q2 2024, avocado pricing is expected to be approximately 10-15% higher than the $1.30 per pound average experienced in Q2 2023[14] Cash Flow and Assets - Cash and cash equivalents were $39.9 million as of January 31, 2024, down from $42.9 million as of October 31, 2023[11] - Net cash provided by operating activities was $9.5 million for Q1 2024, compared to cash used in operating activities of $(1.3) million in the prior year[12] - Total current assets increased to $244.5 million as of January 31, 2024, up from $220.1 million at October 31, 2023[24] - Total assets increased to $937.5 million as of January 31, 2024, compared to $914.8 million at October 31, 2023[24] - Total liabilities rose to $405.7 million, compared to $386.5 million at the end of the previous quarter[25] - Inventory levels increased to $85.9 million, up from $70.8 million at the end of the previous quarter[24] Capital Expenditures - Capital expenditures for Q1 2024 were $9.9 million, compared to $17.6 million in the prior year[13] Segment Performance - Marketing and Distribution adjusted EBITDA was reported at $11.0 million, a significant increase from $4.6 million year-over-year[33] - International Farming adjusted EBITDA showed improvement, with a loss of $0.5 million compared to a loss of $1.8 million in the previous year[33] - The company sold 151.6 million pounds of avocados, slightly down from 152.3 million pounds in the same quarter last year[35] Future Outlook - The company plans to continue focusing on market expansion and new product development to drive future growth[32]

Core Insights - Mission Produce, Inc. will release its financial results for the fiscal first quarter ended January 31, 2024, after market close on March 11, 2024 [1] - A conference call and webcast will be held on the same day at 5:00 PM Eastern Time to discuss the financial results [1] Company Overview - Mission Produce is a global leader in sourcing, producing, and distributing fresh Hass avocados, with additional offerings in mangos and blueberries [3] - The company has been in operation since 1983 and services retail, wholesale, and foodservice customers in over 25 countries [3] - Mission Produce operates four state-of-the-art packing facilities in California, Mexico, and Peru, with additional sourcing capabilities in various countries including Chile, Colombia, and the Dominican Republic [3] - The company has a global distribution network with strategically positioned forward distribution centers across North America, China, Europe, and the UK, providing value-added services such as ripening, bagging, custom packing, and logistical management [3]

Core Viewpoint - Mission Produce, Inc. will release its financial results for the fiscal first quarter ended January 31, 2024, on March 11, 2024, after market close, followed by a conference call to discuss the results [1]. Group 1: Financial Results Announcement - The financial results for the fiscal first quarter will be announced after market close on March 11, 2024 [1]. - A conference call and webcast will be held at 5:00 PM Eastern Time on the same day to discuss the financial results [1]. Group 2: Conference Call Details - The conference call can be accessed live by dialing (877) 407-9039 for domestic callers and (201) 689-8470 for international callers [2]. - A replay of the call will be available until March 25, 2024, with specific dialing instructions for both domestic and international callers [2]. - The live audio webcast will be accessible on the Company's Investor Relations website, with an archived replay available shortly after the live event [2]. Group 3: Company Overview - Mission Produce is a global leader in sourcing, producing, and distributing fresh Hass avocados, with additional offerings in mangos and blueberries [3]. - The company has been in operation since 1983 and services retail, wholesale, and foodservice customers in over 25 countries [3]. - Mission Produce operates four state-of-the-art packing facilities in California, Mexico, and Peru, with sourcing capabilities in various countries including Chile, Colombia, and the Dominican Republic [3].

Financial Data and Key Metrics Changes - In fiscal year 2023, total avocado volume sold increased by 12% to 654 million pounds, but net sales decreased by 9% to $954 million due to a 24% decrease in average per unit avocado sale prices [5][8] - For the fourth quarter of fiscal 2023, total revenue was $257.9 million, an 8% increase compared to the same period last year, driven by higher per unit avocado sales prices [15][17] - Net income for the fourth quarter was $4 million or $0.06 per diluted share, compared to a net loss of $42 million or $0.59 per diluted share for the same period last year [17][18] Business Line Data and Key Metrics Changes - The Marketing and Distribution segment net sales increased by 7% to $236.2 million for the quarter, with adjusted EBITDA increasing by 170% to $10.8 million due to higher per unit gross margins [18][19] - The International Farming segment reported total sales of $40.3 million, a 1% increase compared to the same period last year, but adjusted EBITDA decreased by $11.1 million to $1.1 million due to lower gross profit from volume and price declines [20][21] - The Blueberries segment saw net sales increase by 88% to $19.5 million, with adjusted EBITDA increasing by $4.4 million to $5.4 million, driven by higher pricing and a 29% increase in volume [22][23] Market Data and Key Metrics Changes - The company noted that higher avocado volume sold in 2023 was driven by increased industry supply out of Mexico, contrasting with limited supply in the previous year that led to higher prices [8][10] - The company expects industry volumes to be slightly lower in the first quarter of fiscal 2024 due to a lighter Mexican harvest, but pricing is anticipated to be approximately 15% higher year-over-year [27] Company Strategy and Development Direction - The company aims to drive long-term volume growth by supporting markets with consistent supply and increasing per capita consumption globally, particularly in Europe and Asia [6][12] - The company is building capabilities in growth markets, including a new distribution center in the UK, and diversifying its product offerings to include mangoes and blueberries [7][9] - The company plans to focus on cost control measures and reallocating resources to maximize efficiency, with a modest capital expenditure forecast for fiscal 2024 [12][24] Management Comments on Operating Environment and Future Outlook - Management highlighted that the unpredictable nature of the industry, influenced by weather patterns and marketing decisions from growers, impacts supply-demand equilibrium [7][10] - Looking ahead to 2024, management expects improved pricing in the International Farming segment due to adjustments made to the marketing strategy and improved weather conditions in Peru [11][27] - The company anticipates generating positive free cash flow in fiscal 2024 and beyond, with a focus on maintaining a healthy capital structure [26][27] Other Important Information - The company has made strategic decisions to vertically integrate its business with avocado production in Peru and has developed acreage in Guatemala and Colombia to balance year-round supply [8][10] - Capital expenditures for fiscal year 2023 were $49.8 million, down from $61.2 million the previous year, with a projected budget for fiscal 2024 in the range of $30 to $35 million [24][25] Q&A Session Summary Question: Cost control initiatives and opportunities for 2024 - Management indicated that they have picked the low-hanging fruit in cost reductions, particularly in labor and freight costs, and are focusing on further cost reductions in farming operations in Peru [30][32] Question: Capacity and growth expectations - Management discussed the expansion into the UK and Europe, leveraging state-of-the-art facilities and focusing on asset utilization to support growth [35][39] Question: Changes in marketing strategy - Management highlighted a shift in market allocation and the potential to evaluate partnerships for marketing fruit, particularly in Asia, to enhance returns [46][49]