Earnings call · Jul 2026 (Q3 FY26)

Mission Produce Q3 FY26 earnings call AVO

Sep 8, 2026 Source

Executive summary

Mission Produce Q3 FY26 — Calavo Integration Exceeds Expectations, Synergy Target Raised

Mission Produce delivered strong Q3 FY26 results, exceeding adjusted EBITDA guidance, driven by solid marketing performance and better-than-expected international farming. The Calavo acquisition integration is progressing ahead of schedule, leading to an increased synergy estimate. The company is focused on leveraging its expanded platform to capitalize on robust avocado demand and drive profitable growth, with a significant seasonal increase anticipated in Q4.

Highlights

Adjusted EBITDA of $32.4 million exceeded the high end of guidance ($28 million-$32 million).
Annualized cost synergy estimate for Calavo acquisition increased from $25 million to over $30 million.
U.S. retail avocado volume grew approximately 9% year over year, even with a 15% sequential price increase.
Mission's legacy business increased U.S. retail market share by approximately 60 basis points year-to-date.
Peru farming exportable production expected at 120-130 million pounds, up from 105 million pounds last season.

Concerns

Average per unit avocado sales prices were 9% lower year-over-year due to higher industry supply.
Gross margin decreased 270 basis points to 9.9% year-over-year.
Net loss attributable to Mission Produce, Inc. was $6.5 million, or negative $0.08 per diluted share.
Interest expense increased to $5.1 million from $2.4 million last year due to acquisition debt.
Net cash used in operating activities was $25.9 million through the first nine months, compared to cash provided of $21.4 million last year.

Guidance & targets

Category	Target	Timeline	Confidence
Second half adjusted EBITDA	$84 million to $88 million high materiality	H2 FY26	High
Fourth quarter adjusted EBITDA	$52 million to $55 million high materiality	Q4 · FY26	High
Full year fiscal '26 capital expenditures	approximately $45 million medium materiality	FY26	High
Annualized cost synergies from Calavo acquisition	more than $30 million high materiality	Annualized	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Marketing & Distribution Sales increased due to higher avocado volumes from Calavo and legacy Mission, partially offset by lower average selling prices. Segment adjusted EBITDA increased due to Calavo's post-acquisition results. Avocado volumes sold: higher (incl. Calavo contribution)Per unit margins: sequential improvement from Q2	$414.3 million	increase	—	$24.7 million
Prepared Foods This segment is new post-Calavo acquisition, and Q3 results reflect only the post-acquisition period. The immediate focus is on operating consistency, service, and throughput.	$15.5 million	—	—	$0.2 million
International Farming Sales decreased due to lower average avocado sales prices. Adjusted EBIT declined YoY, but Adjusted EBITDA exceeded expectations due to stronger average sales returns. Majority of annual adjusted EBITDA is generated in Q3 and Q4. Third-party sales: $14.8 millionAffiliated sales to marketing distribution: $31 millionExportable production from Peru farms (for harvest season): 120-130 million poundsExportable production from Peru farms last season: 105 million poundsPeru crop sold through end of Q3: 53 million pounds	$45.8 million	decrease	—	$7.6 million
Blueberries Most sales and profitability for this segment are concentrated in the fourth and first quarters.	$5.4 million	increase	—	negative $0.1 million

Deals & partnerships

Calavo Growers, Inc. Acquisition of Calavo Growers, Inc. to expand customer reach, sourcing flexibility, Mexican and California packing capacity, and participation in prepared foods.

The first reporting period following the completion of the acquisition. Integration is progressing, with operations discontinued at the Calavo Temecula facility and fruit moving across combined networks.

Risks & headwinds

Lower average per unit avocado sales prices Q3 FY26

9% lower YoY

Mitigation:Multi-origin sourcing model, balancing fruit from Mexico, California, and Peru to match demand and maximize value.

Higher industry supply environment Q3 FY26

Not quantified, but cited as reason for lower prices

Mitigation:Leveraging category expansion and durable demand for future growth.

Integration-related costs and purchase accounting adjustments Q3 FY26

$12.6 million transaction advisory and integration costs; $5.2 million acquired inventory step-up amortization; $1.5 million acquired intangible amortization; $6.1 million financing, tax, and supply chain optimization expenses

Mitigation:Expected to be temporary (inventory step-up) or vary by quarter based on timing of actions.

Increased interest expense Q3 FY26

$5.1 million in Q3 FY26, up from $2.4 million last year

Mitigation:Focus on reducing debt over time.

Negative net cash from operating activities First nine months FY26

Net cash used of $25.9 million through first nine months, compared to cash provided of $21.4 million last year

Mitigation:Expects meaningful seasonal improvement in Q4 as Peru avocado crop is sold and blueberry activity increases.

What to watch in Q4 FY26

Calavo integration synergy realization

Throughout fiscal 2027

Current Annualized estimate increased to >$30M from $25M

Target Synergies contributing meaningfully to financial results

Why it matters

Key driver for improved profitability and validates the acquisition thesis.

We expect synergies to begin contributing to financial results in Q4 and build more meaningfully throughout fiscal 2027.

Q&A highlights

What specific factors drove the increase in the annualized synergy estimate from $25 million to over $30 million?

John Pawlowski explained that detailed integration work revealed incremental transportation synergies, operating efficiencies in packhouses, and additional SG&A opportunities, which were not fully apparent during due diligence. These smaller, cumulative savings across various functions quickly added up.

“The numbers started to add up fairly quickly, and we feel confident that moving from that $25 million to $30 million is the right thing to do for now.”

asked by Mark Smith · answered by John Pawlowski

2 min read 5 chapters

Detailed narrative

Avocado Category Dynamics

The U.S. avocado market saw robust demand in Q3 FY26, with retail volume up approximately 9% year over year despite a 15% sequential price increase. Household penetration increased by 50 basis points year-to-date, and per capita consumption reached a record 10 pounds, 12% higher than last year. This indicates a durable expansion of the consumer base following a period of lower prices, supporting continued category growth in both the U.S. and international markets.

Calavo Integration Progress and Synergies

The acquisition of Calavo Growers is progressing ahead of schedule, reinforcing Mission's strategic goals by expanding customer reach, sourcing flexibility, and packing capacity. Initial integration work has led to an increase in the annualized cost synergy estimate from at least $25 million to more than $30 million, primarily driven by higher-than-anticipated SG&A savings and network optimization opportunities. The company has already begun moving fruit across the combined network and discontinued operations at the Calavo Temecula facility, with synergies expected to contribute to financial results starting in Q4 FY26 and building throughout FY27.

International Farming Performance

The international farming segment exceeded expectations due to stronger average sales returns. Exportable production from Peru farms is projected to be 120-130 million pounds for the season, up from 105 million pounds last year, with a greater portion expected in Q4. Effective farming practices and nutrition have helped trees withstand weather challenges, leading to better performance than the broader market. The harvest is approximately one week from completion, with high visibility into fruit allocation.

Prepared Foods Segment Outlook

Following the Calavo acquisition, Prepared Foods is now a separate reportable segment, generating $15.5 million in sales and $0.2 million in adjusted EBITDA during its post-acquisition period in Q3. The immediate focus is on operating consistency, service, and throughput. Longer-term opportunities include capacity expansion in Mexico, leveraging combined customer networks for new opportunities, and exploring global market expansion, utilizing Mission's global footprint for greater optionality.

Capital Allocation and Financial Position

Near-term capital allocation priorities focus on supporting integration, maintaining liquidity, reducing debt, selective high-return investments, and returning capital to shareholders through share repurchases. The company repurchased $9.4 million of common stock in the first nine months of FY26. Cash and cash equivalents stood at $47.1 million, with total long-term debt at $400.3 million as of July 31st. Net cash used in operating activities was $25.9 million through the first nine months, with a meaningful seasonal improvement expected in Q4.

AI-generated summary of the company's earnings call. Not investment advice.