Calavo Growers Inc

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Mission Produce Posts 38% Avocado Volume Jump as Margins Slip

Mission Produce reported a 38% year-over-year jump in avocado volumes in the third quarter of fiscal 2026, aided by Calavo and higher legacy Mission Produce volumes, while average per-unit avocado selling prices declined 9% and gross margin contracted 270 basis points to 9.9%. Adjusted EBITDA of $32.4 million exceeded management's guidance, and the company expects fourth-quarter adjusted EBITDA of $52-$55 million, supported by a greater contribution from its owned Peruvian crop, the seasonal blueberry ramp, a full quarter of Calavo and better avocado margin dynamics. Mission Produce also raised its annualized Calavo synergy target to more than $30 million from at least $25 million, with benefits beginning in the fourth quarter and building through fiscal 2027. U.S. retail avocado volume rose about 9% year over year despite a 15% sequential increase in retail prices. Shares of Mission Produce have gained 16.4% in the last three months compared with the industry's growth of 8.1%, and the stock carries a Zacks Rank #2 (Buy).

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Mission Produce Positioned for Upside Ahead of Q3 Results

Mission Produce is positioned for long-term upside ahead of its fiscal third-quarter results, according to an analysis by Insider Monkey. The company, which derives about 85% of revenue from avocados, saw sales fall 20% in the first half as avocado prices collapsed due to a supply glut from Mexico, but prices are now expected to recover amid drought stress in Michoacán and a seasonal shift toward Mission's own Peruvian harvest. Management expects fiscal Q3 pricing to decline about 15% year over year, compared with 30% and 36% declines in the prior two quarters, and has guided to adjusted EBITDA of $84 million to $88 million for the second half. The recent $465 million acquisition of Calavo Growers adds two Mexican packhouses and higher-margin prepared foods, while insiders including directors and the largest shareholder have been buying shares. At 11.9 times forward EV/EBITDA, the analysis values the stock at about $16.50 per share, roughly 29% above current levels.

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Mission Produce Acquires Calavo Growers, Expects $25 Million in Synergies

Mission Produce has completed its acquisition of Calavo Growers, expanding its packing and distribution footprint and adding guacamole and ready-to-eat offerings to its portfolio. Management expects at least $25 million in annualized cost synergies within 18 months, with benefits beginning in the fiscal fourth quarter and accelerating through fiscal 2027. The company also reported fiscal second-quarter adjusted EBITDA of $7.1 million, down from $19.1 million a year earlier, pressured by unusually high avocado supplies and an unfavorable fruit-size mix. Mission Produce expects second-half adjusted EBITDA of $84 million to $88 million, supported by recovering avocado margins, stronger contributions from Peru and blueberries, a full-quarter contribution from Calavo in the fiscal fourth quarter, and initial synergy benefits. The company anticipates fiscal 2026 capital expenditures of roughly $45 million and exportable Peruvian avocado production of 120 million to 130 million pounds, up from 105 million pounds in the prior season.

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Mission Produce shares surge 23.7% since last earnings report

Mission Produce shares have risen 23.7% since its last earnings report, outperforming the S&P 500. The company reported second-quarter fiscal 2026 adjusted earnings of 1 cent per share, missing the consensus estimate of 5 cents, while revenue of $290.9 million beat expectations despite a 24% year-over-year decline. Profitability was pressured by a 36% drop in average avocado pricing and a supply-demand mismatch for core fruit sizes in April, though avocado volumes rose 15%. Mission Produce completed its acquisition of Calavo Growers on May 28, 2026, and guided third-quarter adjusted EBITDA to $28-$32 million, with second-half adjusted EBITDA projected at $84-$88 million, supported by a full quarter of Calavo in the fourth quarter and stabilizing margins.

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Mission Produce Shifts to Broader Fresh-Food Platform, Aims for Steadier Margins

Mission Produce is repositioning itself as a broader fresh-food platform rather than just an avocado supplier, following its Calavo acquisition and amid strong avocado demand. The company reported a 15% increase in avocado volume in its second quarter of fiscal 2026, with U.S. consumption reaching new highs and over 1.6 million new households entering the category. The Calavo deal adds tomatoes, papayas, and prepared foods like guacamole and salsas, which could reduce reliance on volatile avocado pricing. Mission Produce also expects exportable avocado production from its owned Peru farms to reach 120 to 130 million pounds in fiscal 2026, up from 105 million pounds in the prior harvest, supporting better fixed-cost absorption and supply diversification. Despite these trends, the stock carries a Zacks Rank of 3, or Hold, with a Momentum Score of F, suggesting investors may wait for clearer earnings improvement before turning more bullish.

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Mission Produce Stock Is More Wait-and-See Than Buy Now, Zacks Says

Mission Produce offers investors a trade-off after its Calavo acquisition, but recent earnings weakness makes the stock a wait-and-see play rather than a clear buy now. The company sold 15% more avocado volume in its latest quarter, yet revenues fell 24% to $290.9 million because average avocado pricing dropped 36%, and adjusted earnings of 1 cent per share missed the Zacks Consensus Estimate of 5 cents. Adjusted EBITDA fell to $7.1 million from $19.1 million a year earlier, while gross margin declined 50 basis points to 7.0%. The Calavo deal adds North American avocado scale, packing capacity, and supply flexibility, with management targeting at least $25 million in annualized cost synergies within 18 months of closing, but it also brings integration risk and $350 million in term-loan indebtedness. AVO trades at 18.2 times forward 12-month earnings, below its five-year median of 21.0 times, and carries a Zacks Rank #3 (Hold) with a Value Score of B, Growth Score of C, Momentum Score of F, and VGM Score of C. The stock needs better estimate trends, cleaner operating results, and visible Calavo synergy progress before earning a more confident bullish case.

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Mission Produce Drives 15% Volume Growth Amid Pricing Pressure

Mission Produce achieved a 15% year-over-year increase in avocado volumes during its second fiscal quarter of 2026, even as an unusually large Mexican crop pressured industry pricing and margins. The company's vertically integrated model and multi-region sourcing network helped maintain customer service levels and outperform peers during a period of extremely low prices. Its marketing and distribution segment generated 15% volume growth and a roughly 5% increase in gross profit on a first-half basis. Looking ahead, the acquisition of Calavo is expected to deliver at least $25 million in annualized cost synergies within 18 months through the elimination of redundant operations, SG&A expenses, and infrastructure costs.

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