Mission Produce’s Q3 Earnings Call: Our Top 5 Analyst Questions
Mission Produce’s third quarter was marked by strong execution, as volume growth and effective global operations helped the company outperform Wall Street’s expectations, driving a positive market reaction. Management highlighted that a 13% increase in avocado sales volumes, particularly in Europe and Asia, offset the impact of lower average pricing caused by increased global supply. CEO Steve Barnard credited the company’s integrated sourcing and distribution platform for enabling flexibility to shift product to the most favorable markets, while President John Pawlowski noted that Peruvian orchards’ recovery from previous weather disruptions played a significant role in the quarter’s results.
Is now the time to buy AVO? Find out in our full research report (it’s free for active Edge members).
Mission Produce (AVO) Q3 CY2025 Highlights:
- Revenue: $319 million vs analyst estimates of $293.9 million (10% year-on-year decline, 8.5% beat)
- Adjusted EPS: $0.31 vs analyst estimates of $0.23 (34.8% beat)
- Adjusted EBITDA: $41.4 million vs analyst estimates of $33.1 million (13% margin, 25.1% beat)
- Operating Margin: 8.8%, in line with the same quarter last year
- Sales Volumes rose 13% year on year (0% in the same quarter last year)
- Market Capitalization: $829.9 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Mission Produce’s Q3 Earnings Call
- Mark Smith (Lake Street Capital) asked about the outlook for mango growth. President John Pawlowski described a continued focus on market share and cross-selling opportunities, expecting a similar growth trajectory to recent years.
- Mark Smith (Lake Street Capital) inquired about risks to free cash flow targets. CFO Bryan Giles pointed to weather and crop conditions as variables but expressed confidence in the company’s flexibility to adjust spending if needed.
- Mark Smith (Lake Street Capital) questioned capital allocation priorities given lower leverage and CapEx. Giles indicated that growth remains the priority, but the company is open to buybacks and strategic opportunities depending on market conditions.
- Mark Smith (Lake Street Capital) sought clarity on whether the CEO transition would change the company’s strategy. Pawlowski said the focus will remain on leveraging recent infrastructure investments for both organic and inorganic growth.
- Puran Sharma Stephens requested granularity on future CapEx allocation. Giles estimated an even split between growth and maintenance, with flexibility to adjust as business needs evolve.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be watching (1) the pace of avocado and mango volume growth in North America and Europe, (2) the effectiveness of promotional campaigns in driving household penetration during periods of lower pricing, and (3) the maturation of new blueberry acreage and its impact on segment profitability. The team will also monitor how management balances growth investment with free cash flow generation as capital spending declines.
Mission Produce currently trades at $11.76, down from $13.13 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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