Mission Produce (AVO) Q3 2024 earnings summary

Executive summary

• Revenue grew 24% year-over-year to $324 million in Q3 2024, driven by higher avocado prices despite a 10% decline in volume sold.

• Adjusted EBITDA increased 49% year-over-year to $31.5 million, reflecting robust per-unit avocado margins and gross margin expansion.

• Net income more than doubled to $12.4 million ($0.17 per diluted share) from $6.6 million ($0.09 per share) in Q3 2023.

• Operating cash flow for the first nine months improved by $62.7 million year-over-year, reaching $55.4 million, driven by effective working capital management.

• U.K. facility reached profitability for the first time since opening, reflecting successful market adaptation.

Financial highlights

• Gross profit increased by $8.6 million to $37 million, with gross margin up 50 basis points to 11.4%.

• Adjusted net income for Q3 was $16.7 million ($0.23 per diluted share), up from $10.3 million ($0.15 per share) last year.

• Adjusted EBITDA for the quarter was $31.5 million, up from $21.2 million a year ago.

• Cash and cash equivalents were $49.5 million as of July 31, 2024, up from $42.9 million at October 31, 2023.

• Free cash flow for the nine months ended July 31, 2024, was nearly $30 million.

Outlook and guidance

• Avocado industry volumes expected to be flat to slightly lower in Q4 2024 due to smaller Peruvian crop and California harvest conclusion.

• Anticipate sequential price decreases but prices to remain about 15% higher than Q4 2023.

• Blueberry segment to see volume increases in Q4, but lower prices expected to impact segment Adjusted EBITDA.

• Full-year capital expenditures projected at $40–$45 million.

• Management expresses confidence in continued operational strength but cautions about external uncertainties.