• Total Revenue: $354.4 million, a 37% increase.
• Avocado Sales Prices: Increased by 36%.
• North American Avocado Sales Volumes: Increased by 9%.
• Gross Profit: $55.8 million, an increase of $28 million.
• Gross Profit Margin: Increased by 490 basis points to 15.7%.
• SG&A Expense: Increased by $6.6 million or 32%.
• Adjusted Net Income: $19.6 million or $0.28 per diluted share.
• Adjusted EBITDA: $36.9 million, a 113% increase.
• Marketing & Distribution Segment Net Sales: $319.6 million, a 35% increase.
• International Farming Segment Sales: $30.3 million.
• Blueberries Segment Net Sales: $31.6 million, up from $19.5 million.
• Cash and Cash Equivalents: $58 million as of October 31, 2024.
• Operating Cash Flow: $93.4 million, a $64.2 million increase.
• Capital Expenditures: $32.2 million for the fiscal year.
• Free Cash Flow: Approximately $60 million for fiscal 2024.

• Warning! GuruFocus has detected 7 Warning Signs with AVO.

Release Date: December 19, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Mission Produce Inc (NASDAQ:AVO) reported a 37% increase in total revenue for the fourth quarter of fiscal 2024, driven by a 36% increase in avocado sales prices.
• The company achieved a significant increase in gross profit, up by $28 million to $55.8 million, with a gross profit margin increase of 490 basis points to 15.7% of revenue.
• Mission Produce Inc (NASDAQ:AVO) successfully leveraged its global sourcing network to maintain consistent supply and capitalize on favorable market conditions, resulting in robust per unit margins.
• The company generated a $64.2 million increase in operating cash flow for fiscal 2024, strengthening its capital structure through reduced leverage.
• Mission Produce Inc (NASDAQ:AVO) reported a strong performance in its Blueberries segment, with net sales increasing to $31.6 million and adjusted EBITDA rising to $8.6 million, driven by higher volumes and yield improvements.

Negative Points

• The international farming segment faced challenges due to the El Nino weather cycle, impacting owned volume and resulting in a decrease in segment sales.
• SG&A expenses increased by $6.6 million or 32% compared to the same period last year, primarily due to higher employee-related costs.
• The company is winding down its Toronto and Calgary facilities, which were not running at a profit, indicating potential inefficiencies in its distribution network.
• Pricing in the Blueberries segment is expected to be approximately 30% lower on a year-over-year basis due to higher overall industry volumes from Peru.
• Mission Produce Inc (NASDAQ:AVO) anticipates that per unit margins on purchased avocados will revert to historical targeted ranges, potentially impacting profitability compared to elevated levels experienced in fiscal 2024.

Q & A Highlights

Q: What led to the actual results exceeding the prerelease expectations for revenue and EBITDA? A: Bryan Giles, CFO, explained that the prerelease was based on preliminary data, and they were optimistic about the marketing & distribution segment. The biggest difference came from the farming and blueberry segments, where volumes sold and average selling prices were higher than expected.

Q: Are there any costs associated with winding down the Toronto and Calgary facilities? A: Stephen Barnard, CEO, noted that these facilities were not profitable, and the company can maintain service levels at lower costs by going direct from other locations. Bryan Giles added that there are some remaining lease payments and asset-related costs, but the impact is not expected to be significant.

Q: What are the expectations for the international farming segment's EBITDA in fiscal 2025? A: Bryan Giles stated that they expect improvement due to cost structure changes and better weather conditions. They anticipate higher volumes and a return to previous EBITDA levels seen in 2021 and 2022 as market conditions stabilize.

Q: How is Mission Produce adapting to potential tariffs on agricultural exports from Mexico? A: Stephen Barnard believes potential tariffs are a negotiation tactic and is not overly concerned. John Pawlowski, COO, emphasized the team's ability to handle disruptions and the resilience of consumer demand, suggesting Mission is well-positioned regardless of tariff outcomes.

Q: How has consumer behavior changed regarding avocado pricing? A: John Pawlowski noted that consumers have adapted to higher prices, driven by inflation and younger consumers entering the market. Bryan Giles added that price points like $1.25 to $1.49 are no longer negatively impacting demand, indicating a shift in consumer price elasticity.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.