Dole Plc Q3 FY2025 earnings call

• Completed the sale of the noncore Fresh Vegetable division in early August, providing greater flexibility in capital allocation. - Announced a $100 million share repurchase program approved by the Board of Directors. - Launched the new Dole Colada Royale pineapple, a result of 15 years of R&D, with high margins and community support. - Diversified EMEA continued its strong performance with revenue growth in Scandinavia, Spain, and the Netherlands. - Integrated Dole Diversified North America into Oppy, the largest diversified fruit distribution sales operation in the North American market.

Fresh Fruit: Revenue increased 11% primarily due to higher volumes and pricing of bananas, pineapple, and plantains worldwide. However, higher sourcing costs for bananas were the major driver in the decrease of adjusted EBITDA in the quarter. Diversified EMEA: Reported revenue increased 11%, with adjusted EBITDA increasing $10 million or 34% driven by strong performances in Scandinavia, Spain, the Netherlands, and South Africa, along with a favorable impact from FX translation. Diversified Americas: Revenue increased 8% or $30 million, and adjusted EBITDA increased $4 million or 46% due to strong performance in the Southern Hemisphere export business and the North American market.

• Full year 2025 adjusted EBITDA is expected to be at the upper end of the targeted range of $380 million to $390 million. - Q4 is impacted by headwinds such as cost pressures, but the overall guidance is still a good benchmark against 2024's outcome. - Early to provide comprehensive guidance for 2026, but over time, the market typically adjusts to the supply/demand equation.

• Macro-economic volatility. - Industry-specific factors like the impact of tropical storms and yield issues in Latin American regions. - Uncertainty regarding tariffs and trade policies affecting tropical produce.

Q: Can you elaborate on the implied outlook for the fourth quarter and drivers for 2026?

A: Rory Byrne mentioned Q4 has headwinds like cost pressures continuing, and it's early to give comprehensive 2026 guidance, but the industry typically adjusts to the supply/demand equation over time.

Q: Any new news on securing tariff exclusions for tropical produce?

A: No new news to share, but confident positive changes will occur over a sensible period of time.

Q: Thoughts on the capital allocation and leverage?

A: Rory Byrne discussed the buyback as part of capital allocation, with routine capital expenditure typically in line with depreciation around $100 million.

Q: How are negotiations with customers going in the annual contracting season?

A: In the middle of the process, customers are aware of the supply situation, and discussions/negotiations are tough but the story is getting across.

Q: Impact of SNAP and government shutdowns?

A: Johan Linden said no real trends seen, with anecdotal stories of slight sales decreases in areas with many government employees, but Dole is represented across all channels.