Mission Produce (AVO) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 results with total revenue up 35% year-over-year to $298 million, driven by higher avocado prices and volumes, and strong blueberry performance.

• Net income reached $7 million ($0.10 per diluted share), reversing a prior year net loss; adjusted net income was $9.8 million ($0.14 per diluted share).

• Adjusted EBITDA rose 166% to $20.2 million, reflecting strong per-unit margins and cost savings.

• Operating cash flow improved to $12.9 million for the first six months, compared to cash used of $(26.1) million last year.

• Cost optimization and efficiency initiatives contributed to improved profitability and cash generation.

Financial highlights

• Gross profit increased by $12.9 million to $31 million, with gross margin up 220 basis points to 10.4%.

• SG&A expense decreased 3% year-over-year, with $2 million in cost savings achieved in H1 FY2024.

• Adjusted EBITDA: $20.2 million (Q2), $39.4 million (six months), up significantly year-over-year.

• Cash and cash equivalents at $46.2 million as of April 30, 2024; working capital: $154.6 million.

• Capital expenditures for the six months were $17.7 million, with full-year CapEx guidance raised to $40-$45 million to accelerate blueberry expansion.

Outlook and guidance

• El Niño weather is expected to reduce Peruvian avocado crop yields by over 50% in H2 2024, negatively impacting International Farming segment profitability.

• Industry avocado volumes projected to decline 10%-15% in Q3 FY2024 versus prior year; pricing anticipated to be flat sequentially but up 15% year-over-year.

• Blueberry segment outlook remains positive, with no major weather impacts expected and premium varietals supporting higher margins.

• Capital expenditures for fiscal 2024 are projected at $40M–$45M, with $35M in remaining spend for the Moruga Blueberry Project.