AVO Q3 Earnings Beat, International Farming Unit Sales Up 79% Y/Y

Core Insights - Mission Produce, Inc. (AVO) reported strong third-quarter fiscal 2025 results with higher profits and sales exceeding expectations, driven by a vertically integrated model and effective execution [1][4][9] - The company achieved adjusted earnings of $0.26 per share, significantly surpassing the Zacks Consensus Estimate of $0.13, and total revenues increased by 10% to $357.7 million, beating the estimate of $329 million [4][5] Financial Performance - Gross profit rose 22% year over year to $45.1 million, with a margin improvement of 120 basis points to 12.6%, primarily due to higher yields in the International Farming segment [6] - Selling, general and administrative expenses increased by 19% year over year to $24.1 million, attributed to higher employee-related costs and profit sharing [7] - Adjusted EBITDA increased by 3% year over year to $1.1 million, supported by higher avocado production [7] Segment Performance - Marketing & Distribution segment net sales rose 7% to $344.1 million, although adjusted EBITDA decreased by 25.3% due to normalized gross margins [10] - International Farming segment sales surged 79% year over year to $49 million, with adjusted EBITDA up 163% to $12.1 million, driven by higher yields [11] - Blueberries segment sales jumped 181% year over year to $4.5 million, with adjusted EBITDA increasing 400% to $0.5 million [12] Cash Flow and Capital Expenditures - Mission Produce ended the quarter with $43.7 million in cash and $128.5 million in long-term debt, with inventory rising 13.4% year over year to $103.4 million [13] - Capital expenditures for the nine months ended July 31, 2025, totaled $39.8 million, focusing on avocado orchard development and blueberry cultivation [14] Outlook - Management anticipates a 15% year-over-year increase in avocado volumes for Q4, driven by strong Peruvian supply and a larger Mexican crop [15] - Average avocado pricing is expected to decline by 20-25% compared to $1.90 per pound last year, while blueberry harvest volumes are also expected to increase [16]