Mission Produce, Inc. Q3 FY2026 earnings call

• Avocado Category Dynamics: U.S. retail avocado volume grew ~9% YoY while prices increased ~15% sequentially, indicating durable demand expansion driven by prior low-price penetration. Per capita consumption is at record levels (>10 lbs).
• Calavo Integration Synergies: Management raised annualized synergy guidance from >$25 million to >$30 million, driven by higher-than-expected SG&A savings and network efficiencies. Synergies are expected to begin contributing in Q4 and build through FY2027.
• Sourcing Flexibility: Improved origin mix from California and Peru allowed better balancing of fruit sizes against customer demand, supporting sequential margin recovery compared to Q2.
• Peru Farm Performance: Exportable production estimated at 120-130 million pounds (vs. 105 million last season). Record productivity and robust quality networks in Europe/North America support confidence in selling remaining volume.
• Blueberry Segment: Early stage; harvest begins soon with newer acreage maturing. Currently contributes minimally but expected to ramp in seasonal quarters.
• Market Share Strategy: Legacy Mission gained ~60 basis points market share YTD. Combined platform offers greater sourcing flexibility and packhouse capacity to deepen leadership without pursuing share at any cost.

• Marketing & Distribution: Revenue of $414.3 million (up from $344.1 million YoY). Adjusted EBITDA was $24.7 million (up from $20 million YoY). This segment contributed approximately 92% of total revenue.
• International Farming: Sales of $45.8 million (down from $49 million YoY). Adjusted EBIT was $7.6 million (down from $12.1 million YoY), though Adjusted EBITDA exceeded expectations due to stronger average sales returns than forecast.
• Prepared Foods: Sales of $15.5 million with Adjusted EBITDA of $0.2 million. Note: Results reflect only the post-acquisition period and are not a full quarter run rate.

• Full Year FY2026 Adjusted EBITDA: Reaffirmed range of $84-$88 million.
• Q4 FY2026 Adjusted EBITDA: Expected to be $52-$55 million, up sequentially from Q3’s $32.4 million. Drivers include full quarter of Calavo, concentration of Peru crop sales, blueberry ramp, and initial synergy contributions.
• Capital Expenditures: Full year FY2026 CapEx expected to be ~$45 million.

• Integration Execution: Risk that integration actions do not produce sustainable savings or improved service; requires disciplined execution across functions.
• Supply Chain Volatility: Reliance on multi-origin sourcing (Mexico, California, Peru) exposes operations to weather and harvest timing risks, though vertical integration mitigates some supply visibility issues.
• Debt and Liquidity: Total long-term debt approx. $400.3 million; interest expense increased significantly due to acquisition funding. Net cash used in operating activities was $25.9 million in first nine months.
• Purchase Accounting Effects: Temporary increases in cost of sales and SG&A due to acquired inventory step-up ($5.2M) and intangible amortization ($1.5M).

Q: Analyst asked for details on the upside in synergy targets from $25M to $30M+. / A: CEO cited early identification of incremental transportation synergies, packing facility cooperation in Mexico, and broader SG&A/network efficiency opportunities as two organizations integrated over the first 5-8 weeks.