Mission Produce (NASDAQ:AVO) Surprises With Strong Q4

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Revenue: $334.2 million vs analyst estimates of $285.6 million (29.2% year-on-year growth, 17% beat)
Adjusted EPS: $0.10 vs analyst estimates of $0.03 (significant beat)
Adjusted EBITDA: $17.7 million vs analyst estimates of $15.5 million (5.3% margin, 14.2% beat)
Operating Margin: 2.8%, in line with the same quarter last year
Free Cash Flow was -$16 million compared to -$400,000 in the same quarter last year
Sales Volumes rose 5% year on year (0% in the same quarter last year)
Market Capitalization: $848.1 million

Steve Barnard, CEO of Mission, stated, “We were pleased to meet robust consumer demand in our fiscal first quarter and deliver volume growth despite industry supply challenges in Mexico. Our Marketing & Distribution segment drove volume growth despite higher pricing, demonstrating the underlying strength of the category. Additionally, our strategic investments in our Blueberries segment supported significant volume growth which led to solid segment EBITDA contribution. While the operating environment led to lower per unit avocado margins this year due to higher fruit costs, our diversification across categories and markets helped us deliver solid bottom-line results against a tough year-ago comparison. Looking ahead, while the impact of tariffs on Mexican supply dynamics continues to be uncertain and fluid, we will focus on leveraging our competitive strengths in the California and Peruvian sourcing markets to deliver for our customers. Combined with our strong balance sheet and disciplined approach to capital allocation, we believe we're well-positioned to continue creating value for our shareholders.”

Company Overview

Founded in 1983 in California, Mission Produce (NASDAQ:AVO) grows, packages, and distributes avocados.

Perishable Food

The perishable food industry is diverse, encompassing large-scale producers and distributors to specialty and artisanal brands. These companies sell produce, dairy products, meats, and baked goods and have become integral to serving modern American consumers who prioritize freshness, quality, and nutritional value. Investing in perishable food stocks presents both opportunities and challenges. While the perishable nature of products can introduce risks related to supply chain management and shelf life, it also creates a constant demand driven by the necessity for fresh food. Companies that can efficiently manage inventory, distribution, and quality control are well-positioned to thrive in this competitive market. Navigating the perishable food industry requires adherence to strict food safety standards, regulations, and labeling requirements.

Sales Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $1.31 billion in revenue over the past 12 months, Mission Produce is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers. On the bright side, it can grow faster because it has a longer list of untapped store chains to sell into.

As you can see below, Mission Produce’s 11.9% annualized revenue growth over the last three years was solid as consumers bought more of its products.

This quarter, Mission Produce reported robust year-on-year revenue growth of 29.2%, and its $334.2 million of revenue topped Wall Street estimates by 17%.

We also like to judge companies based on their projected revenue growth, but not enough Wall Street analysts cover the company for it to have reliable consensus estimates.

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Volume Growth

Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.

Mission Produce’s average quarterly volume growth was a robust 5.1% over the last two years. This is good because meaningful volume growth is hard to come by in the stable consumer staples sector.

Mission Produce Year-On-Year Volume Growth

In Mission Produce’s Q4 2025, sales volumes jumped 5% year on year. This result was in line with its historical levels.

Key Takeaways from Mission Produce’s Q4 Results

We were impressed by how significantly Mission Produce blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. We think this quarter was a good one. The stock remained flat at $11.70 immediately after reporting.

Should you buy the stock or not? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.

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