Mission Produce Delivers Record Year Amid Pricing Headwinds

Mission Produce, Inc. ((AVO)) has held its Q4 earnings call. Read on for the main highlights of the call.

Mission Produce’s latest earnings call painted a picture of solid momentum and disciplined execution, as the company delivered record revenue and volumes in fiscal 2025 while navigating pricing headwinds and margin pressure in certain segments. Management emphasized resilience in the face of lower avocado prices and blueberry margin challenges, underpinned by strong cash generation, reduced debt, and a leadership transition aimed at accelerating the next phase of international growth.

Record Revenue and Volume Growth

Mission Produce marked fiscal 2025 as a defining year, posting record revenue of $1.39 billion, up 13% from the prior year. The company also hit a record 691 million pounds of avocados sold, fueled by 7% volume growth. This combination of top-line expansion and volume gains underscores the company’s ability to grow its market presence even in a softer pricing environment, reinforcing its scale advantage in global avocado distribution.

Surging International Market Performance

International markets were a major growth engine in 2025. Revenue in the United Kingdom climbed by more than 60%, contributing to a 40% jump in European volumes overall. Stronger penetration across Europe and Asia helped diversify revenue sources and reduce reliance on any single geography. This international momentum highlights Mission Produce’s success in leveraging its global network and deepening relationships with retailers and foodservice partners abroad.

Strength in the International Farming Segment

The company’s international farming operations delivered standout results, particularly in Peru. Peruvian avocado production more than doubled year over year, with approximately 105 million pounds sold compared with 43 million pounds in the prior season. This scaling of owned farming assets supports more reliable supply, improves cost visibility, and provides a strategic hedge against volatility in third-party sourcing.

Blueberry and Mango Expansion

Beyond avocados, Mission Produce continued to build out its diversified produce platform. Blueberry volumes increased on the back of expanded acreage in Peru, while the mango business gained share, with market share rising to 5.2%, up 150 basis points from last year. These gains demonstrate the company’s ability to leverage its infrastructure and customer relationships to grow complementary categories, even as they face their own margin dynamics.

Improved Profitability Metrics

Financial performance strengthened alongside revenue growth. Adjusted EBITDA rose 12% to a record $41.4 million, reflecting operational leverage and improved throughput. Adjusted net income climbed to $22.2 million, up from $19.6 million a year earlier. These metrics signal that Mission Produce is not only growing the top line but also converting more of that growth into earnings, an important signal for investors focused on profitability and cash returns.

Robust Cash Flow and Deleveraging

The balance sheet and cash profile improved meaningfully over the year. Mission Produce generated $88.6 million in operating cash flow, giving the company financial flexibility to invest and reduce leverage. Long-term debt was trimmed by $18 million, and interest expense fell by $3.2 million, indicating a lower financial burden. This deleveraging trend strengthens the company’s resilience and positions it to fund strategic initiatives without stretching the balance sheet.

Impact of Lower Avocado Pricing

Not all metrics moved in the same direction. Fourth-quarter revenue came in at $319 million, down 10% year over year, primarily due to a 27% drop in average per-unit avocado sales prices. While volumes remained healthy, the pricing environment weighed on quarterly revenue. Management’s ability to offset some of this pressure through higher volume and operational discipline will be a key factor for investors monitoring earnings stability in a commodity-influenced category.

Margin Pressure in the Blueberry Segment

The company’s blueberry segment faced notable margin headwinds. Segment adjusted EBITDA declined to $4.7 million from $8.6 million, pressured by lower per-unit margins and expected lower yield per hectare. While blueberry volumes rose, the profitability drag highlights the risks tied to agricultural yields and market pricing. The segment remains a strategic growth vector but will require careful cost and yield management to restore margin strength.

Near-Term Margin Compression Expectations

Mission Produce signaled that margin pressure may persist in the near term. Management anticipates margin compression in the first quarter of fiscal 2026, driven by the current sourcing environment and higher industry supply. Elevated supply levels typically weigh on pricing and margins, particularly in avocados, and investors should be prepared for some earnings volatility even as volumes continue to trend upward.

Outlook and Strategic Guidance

Looking ahead to fiscal 2026, the company remains optimistic about industry growth and its own strategic positioning. Mission Produce expects approximately a 10% increase in avocado industry volumes, which should support continued volume growth despite price fluctuations. Capital expenditures are projected to decline to about $40 million, enabling accelerated free cash flow generation and greater financial flexibility. The leadership transition, with John Pawlowski assuming the CEO role and Steve Barnard moving to Executive Chairman, signals continuity with an emphasis on sustained growth and international expansion. Combined with the strong performance of the international farming segment, these plans position the company to build on its 2025 momentum.

In summary, Mission Produce’s earnings call highlighted a company delivering record revenue and volumes while managing through commodity price and margin challenges with disciplined execution. International growth, expanding farming operations, and balance-sheet strengthening stood out as key positives, while lower avocado prices and blueberry margin pressure remain watch points. Overall sentiment was confident and forward-leaning, with management focused on leveraging its global footprint and improved cash generation to drive the next leg of growth in fiscal 2026 and beyond.