Mission Produce Q3 Revenue Up 10 Percent

Mission Produce (NASDAQ:AVO) reported third quarter 2025 earnings on September 8, 2025, with revenue up 10% to $357.7 million compared to the prior year period and adjusted EBITDA rising 3% year-over-year to $32.6 million. The company’s international farming segment rebounded strongly with European sales increasing and market reach in Asia broadening, and significant capital investments are nearing completion. Key insights in this summary focus on long-term operating leverage, global scale in sourcing and distribution, and emerging margin tailwinds from diversification.

Record revenue and margin expansion highlight AVO’s leverage

Gross profit climbed 22% year-over-year to $45.1 million, and gross margin rose 120 basis points to 12.6% of revenue, despite average per unit prices for avocados declining 5% year-over-year as volume sold increased 10%. International farming, mainly in Peru, led this margin recovery after last year’s weather disruption, while SG&A rose primarily due to higher incentive compensation from segment outperformance.

"Gross profit increased $8.1 million or 22% to $45.1 million in the third quarter. Gross profit percentage increased 120 basis points to 12.6% of revenue. The increase was driven by our International Farming segment, where avocado production was significantly higher due to increased yields at our own farms in Peru."
-- Bryan Giles, Chief Financial Officer

The combination of structurally higher owned supply enables Mission Produce to weather price cycles and expand margins, enhancing resilience and earnings power over time.

Global presence fuels Mission Produce’s growth and resilience

European sales increased 37% versus the prior year as the U.K. facility achieved improved customer penetration and utilization, while new investments in Asia contributed to broader market reach. The company’s ability to optimize sourcing between Peru, Mexico, and other origins provided critical flexibility and category consistency as supply chains normalized following past disruptions.

"European sales increased 37% in the third quarter versus prior year. Reflecting our improved ability to serve the broader European markets as our UK facility gains momentum through enhanced customer penetration and improved facility utilization. In Asia, we've been able to broaden our reach with new customers following some select investments we made to service demand in the region that we are uniquely able to address through the access to our Peruvian fruit."
-- John Pawlowski, President and Chief Operating Officer

This expanded international footprint diversifies revenue streams and supports long-term retail relationships.

Diversification into blueberries and mangoes drives incremental margin opportunity

Blueberries contributed $4.5 million in net sales (up from $1.6 million year-over-year), with adjusted EBITDA reaching $500,000 on a 25% year-over-year increase in producing acreage; peak harvest and future volume growth are forecast for FY2026 to FY2028. Management plans no significant future greenfield plantings in avocados, focusing incremental investment on maturing existing acreage and deepening third-party partnerships, especially in mangoes.

"This year will be a little over 700 hectares. So that's, you know, 25% ish increase, in harvest acreage. I didn't as Steve alluded to, when we finish, we're gonna be close to a thousand. Hectares, and that will layer in over fiscal, you know, the 26-27, and probably the last part into the 27-28 harvest season. So kinda where we're at today is we still see, you know, a few more years of meaningful ramps in production from where we've been, and then, then things should start to level off a bit as we kind of evaluate what, if any, our next steps, through that joint venture."
-- John Pawlowski, President and Chief Operating Officer

As both maturation of berry acreage and platform extension into mangoes leverages fixed infrastructure and commercial reach.

Looking Ahead

Management expects industry avocado volumes to increase 15% year-over-year, while per pound prices are expected to decline 20%-25% year-over-year, due to ample supply from Peru and Mexico. Capital expenditures for fiscal year 2025 are projected at $50 million to $55 million, with spending expected to moderate in FY2026 as development projects wind down and free cash flow generation increases. Blueberry producing acreage is expected to reach approximately 1,000 hectares by FY2028, at which point acreage-driven growth will plateau and further investment decisions will be revisited; there is no plan for major expansion in avocados or mangoes beyond current commitments.

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This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.