10-Q · June 8, 2026
Mission Produce's Q2 2026 results showed a revenue of $290.9 million, surpassing estimates, while EPS was a loss of $(0.01), missing consensus. The acquisition of Calavo is expected to enhance North American avocado…
Earnings analysis · 10-Q
AVO earnings analysis
Filed September 8, 2026 · Our reading of the company's report
The latest report
Mission Produce delivered strong third-quarter revenue of $450.0M, up 26% year over year, as Calavo integration and higher Mexican avocado volume increased shipments. However, gross margin fell to 9.9% from 12.6%,…
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Mission Produce delivered strong third-quarter revenue of $450.0M, up 26% year over year, as Calavo integration and higher Mexican avocado volume increased shipments. However, gross margin fell to 9.9% from 12.6%, operating margin was only 0.1% versus 5.9%, and GAAP diluted EPS declined to $(0.08) from $0.21. The Calavo acquisition materially increased debt to $402.1M and contributed to negative nine-month operating cash flow of $(25.9)M, while newly disclosed Mexican tax exposures add significant balance-sheet and liquidity risk.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $-0.08
What stood out
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Revenue accelerated on higher avocado volume
Third-quarter net sales increased to $450.0M from $357.7M, up 26% year over year and approximately 55% from $291M in the immediately preceding quarter. Management attributed the annual increase primarily to a 38% increase in avocado volume sold, including Calavo integration and higher Mexican supply.
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Core distribution and blueberries grew
Marketing & Distribution revenue rose to $414.3M from $344.1M, while Blueberries revenue increased to $5.4M from $4.5M. Blueberries operating income improved to $2.4M from a $0.2M loss, primarily due to IEEPA tariff refunds.
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Higher sales did not translate to margins
Gross profit was $44.7M, with gross margin of 9.9% versus 12.6% a year ago. Operating income was only $0.5M, or 0.1% of sales, versus $21.0M and 5.9% in the prior-year quarter.
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Calavo expands platform but weighs earnings
Calavo added a new Prepared Foods segment that generated $15.5M of sales, but it reported a $4.1M operating loss. The quarter included $12.6M of transaction advisory and integration costs.
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Credit covenants remained compliant
The company remained in compliance with its credit covenants, including a maximum consolidated leverage ratio of 3.5-to-1.00 and minimum fixed-charge coverage ratio of 1.25-to-1.00.
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Capital spending remains controlled
The company expects approximately $45M of fiscal 2026 capital expenditures, primarily for International Farming and Blueberries, including Guatemala orchard maintenance and Peru land development and plant cultivation.
What to watch
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Acquisition costs and debt drove a GAAP loss
GAAP diluted EPS declined to $(0.08) from $0.21, and net loss attributable to Mission Produce was $6.5M versus $14.7M of income. Interest expense increased to $5.1M from $2.4M as debt was raised to fund Calavo.
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Operating cash flow turned negative
Cash flow from operations was $(25.9)M for the first nine months versus $21.4M of cash provided in the prior-year period. Working-capital changes used $55.6M, including $18.7M for inventory and $32.9M for trade, grower, and other receivables.
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Leverage increased materially after Calavo
Debt under the syndicated facility increased to $402.1M from $96.0M at October 31, 2025, while cash declined to $47.1M from $64.8M. Variable-rate borrowings were subject to rates of 5.48% to 5.73% as of July 31, 2026.
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Inherited Mexican tax exposure
A newly updated Calavo-related tax risk includes a Mexican SAT assessment of approximately $207.4M and employee profit-sharing liabilities of approximately $6.8M. The company had provisions for uncertain tax positions of approximately $27.5M and VAT receivables of approximately $25.7M that may be delayed or not fully recovered.
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Noncontrolled investments add downside
The filing newly highlights risks from investments in businesses the company does not control. For example, Agricola Don Memo could generate losses, impairment, or uncollectible advances; equity-method income was $1.9M in the quarter and $4.7M year to date.
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Oversupply continues to pressure pricing
International Farming operating income fell to $1.1M from $6.7M as higher global avocado supply reduced average selling prices. The company also reported a 9% decline in per-unit avocado prices in Marketing & Distribution.
Management's outlook
The 10-Q provides no numeric revenue, EPS, or Adjusted EBITDA guidance. Management expects fiscal 2026 capital expenditures of approximately $45M and believes cash on hand, expected operating cash flow, and credit-facility availability will be sufficient for obligations, working capital, and capital expenditures for the next 12 months and beyond.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.