Detailed narrative
Extreme low prices and an April size-curve mismatch pressured margins
The quarter was shaped by the largest Mexican avocado crop in years, driving per-unit sales prices down 36% YoY to multi-year lows. In April a temporary imbalance in core fruit sizes forced Mission to pay higher spot-market prices to fill shortfalls of high-demand sizes while discounting lower-demand shoulder sizes, compounding an already tight margin environment and contributing to harvest delays in California and Peru.
Management characterized the situation as unique and temporary, noting it peaked in April and has improved meaningfully since. Even absent the size mismatch, per-box margins would likely have been below target ranges for the quarter, though much closer to them.
Category expansion and durable demand
High Q2 volumes expanded the category rather than merely clearing supply: U.S. avocado consumption reached new highs, growing strong double digits YoY, with more than 1.6 million new households entering and per-capita consumption reaching nearly 10%. Management said roughly 50% or more of new households historically stick with the category long-term, with retention skewing higher among younger cohorts.
U.S. penetration is in the mid-to-high 70s, and management sees continued runway domestically plus early-stage momentum now emerging in Europe and Asia.
Calavo acquisition closed early and integration underway
The Calavo transaction closed May 28, earlier than initially planned, and Mission now operates as one combined company (about eight days at the time of the call). A dedicated integration workgroup had been planning day-one for months. Near-term value is in eliminating redundant operations and SG&A, optimizing the distribution network, and adding Calavo packhouse capacity to better manage high-volume environments and match size curves to customer programs.
Longer term, management is most excited about Calavo's guacamole and ready-to-eat prepared-foods lines as a higher-margin adjacency with domestic and international expansion potential.
Peru harvest and international farming outlook
Own-farm Peru fruit development is progressing well, with full-season exportable production forecast ~20% above last year and Q3 output guided to an all-time-high 120-130M pounds vs 105M last year, weighted to Q4. International farming H1 results are seasonally immaterial, with EBITDA concentrated in Q3/Q4.
First own-farm Peru arrivals into the U.S. were expected very soon, with third-party Peruvian fruit already being marketed as supply transitions away from Mexico.
Segment dynamics: mango and blueberry
International farming swung to a $1.3M adjusted EBITDA loss (from $1.5M income) on mango-production investments that did not improve yields this harvest and lower third-party blueberry packing/storage volume after an earlier end to the blueberry season. The standalone blueberry segment improved to $1.2M adjusted EBITDA (from $0.8M) as higher per-unit pricing more than offset higher per-unit production costs from lower yields on maturing newer acreage.
Q2 sits outside the peak Peruvian blueberry harvest window (concentrated in fiscal Q1 and Q4).
Capital allocation and balance sheet
Cash and equivalents were $33M at April 30, 2026; net cash used in operating activities was $21M for H1 (including ~$5M of transaction advisory), versus $13M last year, reflecting lower income partly offset by lower working-capital build. Operating cash flows are seasonal, with inventory built in H1 and monetized in H2 as the Peru crop is sold.
Last week the Board approved an increase and extension to the share repurchase program, framed as flexibility to buy back opportunistically when price does not reflect underlying value; no dollar amount was disclosed.
El Nino weather watch
Management is monitoring a potential super El Nino weekly across regions and has seen no significant impact to date, anticipating some warmer Peru weather over the next three to four months. Investments over the past 18-24 months in tree health and nutrition give confidence in the FY26 crop regardless of near-term weather.
FY27 is a bigger watch item: timing of📎 heat and rain spells relative to flowering could affect the next cycle, and management sees potential for slightly lower-than-anticipated Mexican crops in 2027.
Leadership transition
Following the April annual meeting, John Pawlowski formally stepped into the CEO role while founder Steve moved to Executive Chairman and remains actively engaged with the team and board. Andrew Pearson recently joined as VP of Investor Relations and Strategy. Pawlowski noted two decades in the branded food industry before Mission, informing his enthusiasm for the prepared-foods opportunity.