OXNARD, Calif. - Mission Produce, Inc. (NASDAQ:AVO), a leading global supplier of Hass avocados, reported a significant beat on both top and bottom lines for its fiscal first quarter ended January 31, 2024.
The company announced an adjusted EPS of $0.09, surpassing the analyst consensus of -$0.06. Revenue soared to $258.7 million, well ahead of the expected $191.35 million, marking a 21% increase from the same quarter last year.
The company's stock responded positively to the news, climbing 2.99%, indicating investor confidence in the company's performance and future outlook. This uptick is attributed to the earnings and revenue beat, as highlighted by the market's reaction.
Mission Produce's robust revenue growth was primarily driven by a 23% rise in average per-unit avocado selling prices, despite flat avocado volumes. Adjusted net income also saw a significant turnaround, reaching $6.7 million compared to an adjusted net loss of $5.0 million in the same period last year. The improvement in gross profit, which jumped to $28.7 million from $9.0 million, was a result of better per-unit margins, especially in the Marketing & Distribution and Blueberries segments.
CEO Steve Barnard remarked on the company's strong start to the fiscal year, citing solid execution and nearly 700 basis points of gross margin expansion. "Our margin improvement was spurred by strength in avocado margins in our Marketing & Distribution segment, as well as the achievement of record quarterly revenues in our Blueberries segment due to advantageous pricing conditions," Barnard said.
Looking ahead, Mission Produce anticipates avocado pricing to be slightly higher sequentially and about 10-15% higher than the average experienced in the second quarter of fiscal 2023. The company also expects the Peruvian blueberry season to extend into the fiscal second quarter, with approximately 20% of the harvest to be sold during this period.
Investors will be watching closely as the company continues to implement cost savings measures across its farming and packing operations, with the expectation of reaping the benefits in the latter half of the fiscal year. Mission Produce's focus on optimizing business and enhancing profitability is projected to result in a meaningful increase in free cash flow generation for 2024.
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