Core Viewpoint - Calavo Growers, Inc. plans to release its financial results for the fiscal first quarter ended January 31, 2026, and will file its Form 10-Q after the market closes on March 12, 2026 [1]. Company Overview - Calavo Growers, Inc. is a global leader in the processing and distribution of avocados, tomatoes, papayas, and guacamole [2]. - The company sells products under the Calavo brand name, proprietary sub-brands, private labels, and store brands [2]. - Founded in 1924, Calavo has a strong culture of innovation, sustainable practices, and market growth [2]. - The company serves various sectors including retail grocery, foodservice, club stores, mass merchandisers, food distributors, and wholesalers worldwide [2]. - Calavo is headquartered in Santa Paula, California, with facilities throughout the U.S. and Mexico [2].

Core Insights - Mission Produce, Inc. (AVO) has seen a 13% increase in stock price over the past month, outperforming the Zacks Agriculture – Operations industry's 7% rise and the broader Consumer Staples sector's 2.5% return, indicating improved investor sentiment following a solid fourth-quarter fiscal 2025 performance [1][8] - AVO's stock performance has been notably stronger than its closest peers, such as Adecoagro (AGRO), Corteva Inc. (CTVA), and Dole Plc (DOLE), which saw gains of 12.2%, 6.5%, and 0.4% respectively, highlighting the company's growing momentum [2] Stock Performance - AVO's current stock price is $13.12, which is 37.2% above its 52-week low of $9.56 and 7.1% below its 52-week high of $14.12, indicating potential for further upside [6] - The stock is trading above its 50-day and 200-day simple moving averages (SMA), suggesting a bullish sentiment among investors [6][8] Drivers of Momentum - The recent stock momentum is attributed to growing investor confidence in Mission Produce's operational execution and long-term strategy, supported by a fully integrated global platform that balances supply, demand, and pricing volatility [10] - Completion of a multi-year investment cycle has positioned the company for stronger free cash flow generation, enhancing balance sheet flexibility and shareholder value creation [11] - Portfolio expansion into adjacent categories like mangoes and blueberries, alongside a focus on avocados, is driving growth through improved consumer engagement and retailer relationships [12] Management and Strategy - The upcoming CEO transition is expected to maintain continuity in strategy, which is aimed at accelerating global growth, further boosting investor confidence [13] - The Zacks Consensus Estimate for AVO's fiscal 2026 EPS has increased by 47.9% in the last 30 days, although year-over-year declines in sales and EPS are projected at 10.2% and 10.1% respectively [14] Valuation - Mission Produce's forward 12-month P/E ratio stands at 20.6X, significantly higher than the industry average of 15.03X, reflecting market optimism regarding its growth prospects [17] - Despite the premium valuation, it indicates high investor expectations for AVO's future performance and growth potential [18] Investment Consideration - AVO presents a compelling investment opportunity, particularly for those seeking exposure to a company with a robust global platform and disciplined capital strategy, with a Zacks Rank 2 (Buy) suggesting favorable entry points for potential investors [20]

Core Viewpoint - Calavo Growers, Inc. reported a shortfall in earnings per share and revenue in the fourth quarter, but the company remains a significant player in the fresh produce market with strategic initiatives to strengthen its position [1][2]. Financial Performance - In Q4 2025, Calavo Growers reported earnings per share of $0.25, missing the estimated $0.37, and revenue of approximately $124.7 million, falling short of the anticipated $148 million [2][6]. - Total net sales for the quarter decreased from $170 million in the same period the previous year [2]. - Despite the Q4 challenges, the company achieved a net income from continuing operations of $3.8 million [2]. Annual Performance - For the full year, Calavo Growers experienced a remarkable 191% increase in net income from continuing operations [3]. - Adjusted net income rose by 42%, and adjusted EBITDA increased by 12%, indicating significant growth despite fourth-quarter setbacks [3]. Financial Metrics - The company has a price-to-earnings (P/E) ratio of approximately 20.28, indicating a premium valuation by investors [4]. - The price-to-sales ratio is about 0.58, and the enterprise value to sales ratio is approximately 0.49, suggesting favorable market valuation of the company's sales [4]. - A low debt-to-equity ratio of about 0.017 reflects a conservative approach to debt, while a current ratio of approximately 2.30 indicates strong liquidity [4]. Strategic Developments - Calavo Growers announced a combination with Mission Produce, Inc. to enhance its capabilities in sourcing, packing, and distributing fresh produce [5]. - Following the earnings miss, the company's stock saw a 1.1% increase, and Citigroup analyst Patrick Cunningham upgraded the stock from Neutral to Buy, raising the price target from $62 to $70, indicating confidence in the company's long-term prospects [5][6].

Summary of Calavo Growers and Mission Acquisition Conference Call Company and Industry Overview - **Companies Involved**: Mission and Calavo Growers - **Industry**: Fresh produce, specifically avocados, tomatoes, papayas, and prepared foods Core Points and Arguments 1. **Acquisition Announcement**: Mission has entered into a definitive agreement to acquire Calavo, a leading provider in the fresh produce market, particularly avocados and prepared foods [2][4] 2. **Strategic Importance**: The acquisition is seen as a significant milestone for both Mission and the industry, aiming to create a more diversified company positioned for long-term growth [4][6] 3. **Financial Projections**: On a pro forma basis, the combined company is expected to generate approximately $2 billion in net sales and $176 million in adjusted EBITDA for fiscal 2025 [6][12] 4. **Transaction Structure**: Calavo shareholders will receive $27 per share, consisting of $14.85 in cash and 0.9790 shares of Mission stock [7] 5. **Ownership Post-Transaction**: Mission shareholders are expected to own approximately 80.3% of the combined company, while Calavo shareholders will own about 19.7% [7] 6. **Regulatory Approval**: The transaction is expected to close by the end of August 2026, pending regulatory and shareholder approvals [8] Additional Important Insights 1. **Diversification of Product Portfolio**: The acquisition will diversify Mission's offerings into prepared foods, tomatoes, and papayas, enhancing its year-round fresh produce portfolio [6][9] 2. **Operational Synergies**: The companies expect to realize $25 million in annualized cost synergies within 18 months post-close, with potential for additional upside [12][29] 3. **Market Expansion**: The acquisition will enhance Mission's presence in Mexico and California, increasing access to high-quality avocados, which are crucial for the U.S. market [10] 4. **Prepared Foods Segment**: Calavo's prepared foods, including guacamole and salsas, represent a growing market with a total addressable market of approximately $1.7 billion, growing in the high single digits [11] 5. **Customer Base Expansion**: The combined entity will have the ability to serve a broader customer base globally, leveraging the strengths of both companies [22][36] 6. **Innovation and Investment Opportunities**: The merger is expected to create opportunities for innovation and investment in new products, particularly in the prepared foods segment [41] Conclusion The acquisition of Calavo by Mission is positioned as a strategic move to enhance market presence, diversify product offerings, and create significant operational synergies, ultimately aiming for sustained growth and value creation in the fresh produce industry.

Core Insights - Calavo Growers, Inc. reported significant growth in net income from continuing operations, with a 191% increase for the full year 2025, alongside a 42% rise in adjusted net income and a 12% increase in adjusted EBITDA from continuing operations [1][2]. Financial Performance - For the fourth quarter of 2025, total net sales decreased to $124.7 million from $170.0 million in the prior year, with fresh segment sales down 31% to $106.3 million due to a 19% decline in average price per carton and a 5% decrease in total cartons sold [8][12]. - Gross profit for the fourth quarter was $11.6 million, down from $16.3 million, with SG&A expenses decreasing by 6% to $12.3 million [8][14]. - Adjusted net income for the fourth quarter increased by 301% to $4.5 million, or $0.25 per diluted share, compared to $1.1 million, or $0.06 per diluted share, in the prior year [15]. - For the full fiscal year 2025, total net sales were $648.4 million, a slight decrease from $661.5 million, with fresh segment sales down 4% to $576.5 million, while prepared segment sales increased by 12% to $71.9 million [16][19]. Strategic Developments - Calavo announced a strategic combination with Mission Produce, Inc., where Mission will acquire Calavo in a cash and stock transaction valued at $27.00 per share, comprising $14.85 in cash and 0.9790 shares of Mission stock for each share of Calavo [6][9]. - The merger is expected to create a vertically integrated platform with sourcing security and an expanded portfolio across fresh produce categories, along with anticipated cost synergies of $25 million [7][10]. Management Commentary - The CEO of Calavo highlighted the company's resilience in overcoming challenges during fiscal year 2025, including a temporary facility shutdown and an FDA detention hold on avocado imports, while achieving an adjusted EBITDA of $40.8 million, up nearly 12% year over year [10][11]. - Looking ahead to 2026, the company anticipates softer first-quarter results compared to the previous year due to strong avocado supply and pricing dynamics, but remains focused on leveraging increased industry volumes [11][12]. Balance Sheet and Liquidity - As of October 31, 2025, Calavo had cash and cash equivalents of $61.2 million and total debt of $4.1 million, with cash provided by operating activities totaling $21.5 million for the fiscal year [20][42].

Industry Overview - The Zacks Agriculture – Operations industry is facing structural challenges such as volatile commodity prices, high input and labor costs, trade uncertainties, and rising operating expenses, which are compressing margins and testing long-term sustainability [1][4][5] - The industry includes companies involved in the production, transportation, storage, processing, and distribution of agricultural commodities, as well as those engaged in dairy operations and food ingredient development [3] Long-term Outlook - Despite current headwinds, the long-term outlook for the industry remains positive due to innovation in seeds, crop inputs, food processing, and supply chains, alongside rising consumer demand for healthier and sustainably produced food [2] - The adoption of alternative proteins, efficiency gains in grain handling, and demand from emerging markets are contributing to growth opportunities [2] Financial Projections - The U.S. Department of Agriculture projects agricultural exports to reach $173 billion for fiscal 2026, an increase from previous forecasts, driven by stronger export volumes for corn and wheat [6] - Corn exports are expected to be $17.6 billion, up $2.4 billion, while wheat exports are projected to increase to $6.2 billion [6] Cost Pressures - Agricultural companies are experiencing rising costs due to fluctuating commodity prices and inflation, which are squeezing profitability and narrowing margins [4] - Companies are managing higher selling, general and administrative (SG&A) expenses, which may continue to impact profitability [5] Stock Performance - The Zacks Agriculture – Operations industry has underperformed compared to the Zacks Consumer Staples sector and the S&P 500, with a collective stock increase of only 0.9% over the past year [11] - The industry currently holds a Zacks Industry Rank of 166, placing it in the bottom 32% of over 250 Zacks industries, indicating dull near-term prospects [9][10] Valuation Metrics - The industry is trading at a forward 12-month price-to-earnings (P/E) ratio of 14.74X, compared to the S&P 500's 23.51X and the sector's 16.49X [14] - Over the past five years, the industry has seen a P/E range from 10.83X to 17.43X, with a median of 14.16X [14] Key Companies - **Corteva Inc. (CTVA)**: Positioned for above-market growth with a strong product pipeline and innovation strategy, expected to see earnings growth of 28.4% in 2025 [18][19] - **The Scotts Miracle-Gro Company (SMG)**: Focused on core brands and e-commerce, with projected earnings growth of 13.4% in fiscal 2026 [22][23] - **Mission Produce Inc. (AVO)**: Demonstrating strong performance through effective integration of sales and sourcing, with a significant earnings surprise of 340.8% in the past four quarters [25][26] - **Adecoagro S.A. (AGRO)**: Engaged in diversified agricultural activities, though facing a projected earnings decline of 89.1% in 2025 [28][29]

Core Viewpoint - Calavo Growers, Inc. plans to release its financial results for the fiscal fourth quarter and fiscal year ended October 31, 2025, on January 14, 2026, after market close [1] Group 1: Company Overview - Calavo Growers, Inc. is a global leader in sourcing, packing, and distribution of fresh avocados, tomatoes, papayas, and processing of guacamole and other avocado products [2] - The company was founded in 1924 and has a strong culture of innovation, sustainable practices, and market growth [2] - Calavo products are marketed under the Calavo brand name, proprietary sub-brands, private labels, and store brands [2] - The company serves various sectors including retail grocery, foodservice, club stores, mass merchandisers, food distributors, and wholesalers worldwide [2] - Calavo is headquartered in Santa Paula, California, with facilities throughout the U.S. and Mexico [2]

Core Insights - Mission Produce, Inc. (NASDAQ: AVO) is a leading global supplier of avocados and fresh produce, with strong operations in Marketing and Distribution and International Farming, particularly in Mexico and Peru [1] Financial Performance - AVO reported earnings per share (EPS) of $0.22, exceeding the estimated $0.19, and achieved revenue of $319 million, surpassing the anticipated $293.9 million [2][6] - The company achieved a record full-year revenue of $1.39 billion in fiscal year 2025, marking a 13% increase from the previous year [2][6] Growth Drivers - Growth is driven by strong execution in Marketing and Distribution and higher yields from Peruvian orchards, with nearly $180 million generated in cash flow from operations over the past two years [3] - AVO is transitioning sourcing from Mexico to Peru, benefiting from increased avocado volumes and also seeing growth in blueberry and mango sales [4] Financial Stability - AVO has a price-to-earnings (P/E) ratio of approximately 24.84 and a price-to-sales ratio of about 0.67, indicating a relatively low valuation compared to its sales [5] - The company demonstrates financial stability with a low debt-to-equity ratio of approximately 0.023 and a current ratio of about 1.95, indicating the ability to cover short-term liabilities [5][6]

Trade Policy - The White House released a 98-page document detailing tariff exemptions on a wide range of products [1] - Hundreds of products are now exempt from tariffs [1] - The tariff rollback is seen as a measure to address affordability concerns in American politics [3] - The White House aims to lower costs for American consumers by rolling back tariffs previously imposed by President Trump [4] Affected Products - Products exempted from tariffs include coffee, bananas, tomatoes, avocados, mangoes, and limes [2] - Other products receiving tariff exemptions include beef and copper [2]

Core Points - Lee E. Cole will retire as President and CEO of Calavo Growers, effective December 8, 2025, after four decades of leadership [1] - B. John Lindeman, former CFO and current Board member, has been appointed as the new President and CEO [1][2] Leadership Transition - Kathleen Holmgren, Chair of the Board, expressed gratitude for Mr. Cole's contributions and leadership during his tenure [2] - Mr. Cole highlighted his pride in the company's achievements and confidence in Mr. Lindeman's leadership for future success [2] - Mr. Lindeman emphasized his commitment to driving growth and creating sustainable value for shareholders [2] Background of New CEO - Mr. Lindeman previously served as CEO of Hydrofarm Holdings Group and held various leadership roles in finance and investment banking [2][3] - He is a Chartered Financial Analyst and holds a Bachelor of Science in business administration [3] Strategic Review - Calavo Growers is currently evaluating strategic alternatives following a non-binding acquisition proposal received on June 11, 2025 [4] - The review process is ongoing and may or may not lead to a transaction [4] Company Overview - Calavo Growers, Inc. is a global leader in the processing and distribution of avocados, tomatoes, papayas, and guacamole [5] - The company was founded in 1924 and has a strong culture of innovation and sustainable practices [5] - Calavo serves various markets including retail grocery, foodservice, and wholesalers worldwide [5]