Mission(US:AVO)2025-09-08 22:00Financial Data and Key Metrics Changes - Total revenue for Q3 2025 increased by 10% to $357.7 million, driven by a 10% increase in avocado volume sold, partially offset by a 5% decrease in average per unit sales prices [11][12] - Gross profit increased by $8.1 million, or 22%, to $45.1 million, with gross profit percentage rising by 120 basis points to 12.6% of revenue [12] - Adjusted net income for the quarter was $18.2 million, or $0.26 per diluted share, compared to $16.7 million, or $0.23 per diluted share last year [13] - Adjusted EBITDA increased by 3% to $32.6 million, driven primarily by increased avocado production [13] Business Line Data and Key Metrics Changes - The marketing and distribution segment net sales increased by 7% to $344.1 million, primarily due to avocado volume and pricing dynamics [13][14] - The international farming segment saw gross sales increase by 79% to $49 million, with adjusted EBITDA rising by 163% to $12.1 million, driven by recovery in Peruvian avocado production [14] - Blueberry segment net sales increased to $4.5 million from $1.6 million in the prior year, with adjusted EBITDA rising to $0.5 million due to higher volumes and prices [15] Market Data and Key Metrics Changes - European sales increased by 37% in Q3 compared to the prior year, reflecting improved capabilities in serving broader European markets [8] - The company expects industry volumes to be approximately 15% higher in Q4 compared to the prior year due to ample Peruvian product and a larger Mexican crop [18] Company Strategy and Development Direction - The company emphasizes its global sourcing strategy and vertical integration as key differentiators in the marketplace, enabling consistent performance and growth [3][5] - Strategic investments in international markets, particularly in Europe and Asia, are aimed at enhancing customer penetration and service [8][41] - The diversification strategy includes expanding market share in adjacent categories such as mangoes and blueberries, leveraging existing operational capabilities [10][30] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong performance despite market challenges, highlighting the effectiveness of their operational strategies [3][4] - The company anticipates a transition to a larger Mexican crop and expects pricing to be lower year-over-year due to increased supply [19][20] - Management noted that while tariffs are expected to incur a $10 million impact, this is less than 1% of total costs, indicating a manageable risk [18] Other Important Information - Cash and cash equivalents were $43.7 million as of July 31, 2025, with operating cash flow of $34 million generated during Q3 [15][16] - Capital expenditures for the fiscal year-to-date period were $39.8 million, primarily for avocado and blueberry farming-related investments [16][17] Q&A Session Summary Question: Impact of tariffs on financials - The company has incurred over $5 million in tariff-related expenses through the first nine months and expects Q4 to align with Q3 [22] Question: Changes in international shipping and pricing - The company has not significantly shifted product placement due to tariffs, focusing instead on meeting demand where it exists [23][24] Question: Expectations for acreage expansion in blueberries - The company plans to complete its target of approximately 1,000 hectares for blueberries by the end of the year, with no major plans for avocado acreage expansion [26][29] Question: International market opportunities - The company is strategically positioned to optimize U.S. market fulfillment while exploring growth opportunities in Europe and Asia [38][41] Question: SG&A expenses and run rate - The increase in SG&A was largely due to variable costs related to performance and incentives, making it difficult to establish a fixed run rate [44]