Dole (DOLE) Q4 2025 Earnings Call Transcript

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Date

Wednesday, Feb. 25, 2026 at 8 a.m. ET

Call participants

• Chief Executive Officer — Rory Byrne
• Chief Financial Officer — Jacinta Devine
• Head of Investor Relations — James O'Regan

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Takeaways

• Adjusted EBITDA -- $395 million for the full year, exceeding the company's latest guidance and marking a 1% increase from the prior year.
• Fresh Fruit EBITDA -- $189 million for the year, reflecting resilience amid elevated sourcing costs and weather-related disruptions, particularly from Tropical Storm Sarah.
• Diversified EMEA adjusted EBITDA -- $150 million, a 14% increase year over year, driven by strength in Spain, the Nordics, and recovery in the Netherlands.
• Diversified Americas adjusted EBITDA -- Full-year growth of 21% and Q4 growth of 32%, supported by higher exports, margin expansion, and strong contributions from joint ventures.
• Revenue -- £2.4 billion in Q4, up 9.2% on a reported basis and 5.7% like-for-like; full-year revenue reached £9.2 billion, up 8.2%.
• Net income -- Q4 net income of £6 million versus a £31.6 million loss in the prior period; full-year net income was £82 million, down from £143 million, affected by losses from discontinued operations and non-cash charges.
• Fresh vegetables sale -- Business divested for $140 million gross proceeds, completed Aug. 2025, sharpening focus on core divisions.
• Port operations sale -- Agreement to sell Guayaquil, Ecuador port business, with expected net proceeds of approximately $75 million upon closing.
• Credit facility renewal -- $1.2 billion in renewed facilities, boosting financial flexibility to support future growth.
• Share repurchase program -- $100 million authorized in November; $4.5 million has been spent to date at an average price of $15.15 per share.
• Castle & Cooke exit -- Shareholder exited in September through a registered offering, removing share sale overhang and increasing trading liquidity.
• Index eligibility transition -- Transition to full U.S. domestic issuer filings completed, making the company eligible for a broader set of U.S. equity indices.
• Product innovation -- Launch of Cladeau Royale pineapple in October, a new conventionally bred variety with awarded taste, enhancing the product portfolio.
• Leverage -- Closed the year with a net leverage ratio of 1.5x, reduced from 1.6x year over year.
• Interest expense -- £66.5 million for the year, with 2026 interest expense expected to be approximately $60 million, assuming stable base rates.
• Operating cash flow -- £123 million generated during the year, with positive Q4 working capital inflow, albeit moderated by revenue growth.
• CapEx -- £121.5 million spent for the year, including £36 million for two vessel finance lease buyouts, and £16 million on Honduran farm rehabilitation (covered by insurance).
• Free cash flow -- £1.7 million from continuing operations; normalized free cash flow would be $81 million excluding lease buyouts, Honduran farm rehabilitation, and one-time tax items.
• Dividend -- $0.085 per share declared for Q4.
• 2026 guidance -- Management targets adjusted EBITDA of at least $400 million for 2026, with expectations of stronger results in the back half of the year.
• Medium-term FCF conversion guidance -- Management reiterated a 30%-35% target for adjusted free cash flow conversion over the longer term.

Summary

Dole (NYSE:DOLE) reported full-year adjusted EBITDA of $395 million, surpassing internal targets, and highlighted strategic capital allocation actions including major divestitures and the authorization of a $100 million share repurchase program. The business completed the sale of its Fresh Vegetables division and announced proceeds from a pending port operation sale, creating further scope for portfolio focus and cash redeployment. Management introduced new product innovation with the Cladeau Royale pineapple and completed operational steps to increase index inclusion eligibility via domestic issuer status. For 2026, the company is targeting minimum adjusted EBITDA of $400 million, anticipating normalized cash flow and continued investment in growth and efficiency projects.

• Operational priorities for the coming year include executing development pipeline initiatives, maintaining disciplined capital allocation, optimizing operating efficiencies, and reinforcing category leadership.
• The company expects continued growth in Diversified Americas, with integration synergies from the Dole Diversified North America Haddafi acquisition anticipated to contribute.
• Management conveyed that banana demand remains robust in core markets and that ongoing recovery of Honduran farm output—supported by targeted investments—should progressively improve segment margins.
• Stable to declining interest rates and completed refinancing have reduced debt service costs and provided capital structure stability entering the new year.
• Leadership noted, "we have set the target at a minimum of $400 million for the year," signaling cautious guidance in view of ongoing market and supply cost uncertainty.

Industry glossary

• Cladeau Royale: A conventionally bred pineapple variety developed by Dole, characterized by enhanced sweetness and coconut flavor notes, launched in 2025.
• Haddafi integration: Refers to the operational integration of Dole Diversified North America's acquisition of Haddafi, expected to yield efficiency gains.

Full Conference Call Transcript

Rory Byrne: Thank you, James, and welcome everybody, and thank you for joining us today as we look back over 2025, discuss our latest quarterly results, and provide our initial outlook for the coming financial year. So turning firstly to Slide 4 for a recap of our key developments for 2025. We are very pleased to deliver strong operating results for the year with EBITDA of $395 million, coming in ahead of our latest guidance. Our two diversified fresh produce segments delivered excellent results and excellent growth, offsetting the anticipated short-term decline in Fresh Fruit due to higher sourcing costs. During 2025, we also achieved several important strategic milestones.

A key strategic priority for us was to exit the Fresh Vegetables business, and we are very pleased to have successfully completed the sale of this division in August 2025 for gross consideration of $140 million. This sale has allowed us to fully focus on our core operating divisions and has created greater flexibility in our capital allocation strategy. Continuing with our strategic focus on optimizing our asset base and operations, we announced just before the year-end an agreement to sell our port and port operations company in Guayaquil, Ecuador. We expect to receive net proceeds of approximately $75 million once this transaction closes.

Earlier in the year, we also successfully completed a $1.2 billion renewal of our credit facilities, which strengthened our financial capacity and enhanced our flexibility to support future growth initiatives. In November, we announced that our Board had approved a $100 million share repurchase program as part of the development of our capital allocation strategy. This will be used opportunistically and, to date, we have spent $4.5 million repurchasing shares. Another important milestone for the group was the exit of Castle & Cooke as a shareholder in September by way of a registered offering. This removed the overhang of the potential share sale and provided significant additional liquidity to our daily trading volumes.

Following on from this theme, we have now transitioned to full U.S. domestic issuer filings. Over time, we believe this important transition will improve our eligibility for inclusion in a broader range of U.S. equity indices. Finally, in October, we had a key operational development with the successful launch of Cladeau Royale, our game-changing new variety of pineapple, and the culmination of 15 years of dedicated R&D at our research facilities on Juris. This conventionally bred variety has a sweeter taste than a typical pineapple, with the added distinction of coconut flavors.

It has been extremely well received by both our customers and consumers and has already won multiple awards, including being voted best new product within the fresh fruit category in a recent survey by Newsweek. As volumes continue to come online, we believe this will be an important product within our portfolio.

Turning now to the operational review and starting with the Fresh Fruit slide on Slide 6. In Q4, the industry continued to face elevated sourcing costs for bananas, pineapples, and plantains, resulting in lower profitability for this segment compared to the prior year. For full year 2025, we delivered EBITDA of $189 million, a resilient result given the sourcing and market backdrop and indeed the weather-related disruption, not least the knock-on effects of Tropical Storm Sarah's impact on production and supply. Thankfully, the rehabilitation of our Honduran farms is well underway and on track for full recovery later this year.

We expect produced volumes and competitiveness to improve over the course of 2026 with the benefit of targeted investments in production and supply chain cost initiatives. Importantly, banana demand remains robust in both North America and Europe, and pineapple innovation, including the well-received Dole Collado Real, is supporting this category. Overall, while 2026 has started with the continuing unfavorable supply dynamic, we do expect the positive demand tailwinds, together with our investments and cost programs, to drive an improvement in profitability as 2026 progresses.

Moving on to the Diversified EMEA segment, this segment had a stable final quarter, ultimately delivering an excellent full-year adjusted EBITDA result of $150 million, an increase of 14% year on year. Over the course of the year, we saw particularly strong contributions from key markets. For example, in Spain, our operations continue to benefit from product diversification and market expansion, underpinned by our very strong position in Canary Island bananas. In the Nordics, the benefits of our investments in our distribution and logistics capability continue to drive growth, and in the Netherlands we saw a good recovery in 2025 after some challenges in the prior year.

Looking ahead, we expect our strong performance to continue in 2026, supported by further development investments across the segment.

And lastly, turning to our Diversified Americas segment. This segment delivered another strong quarter to close the year, consolidating a very positive year of growth. Fourth quarter adjusted EBITDA increased by 32%. For the full year, this amounts to a 21% increase, driven by strong revenue growth, margin expansion, and increased EBITDA contributions from our joint venture businesses within the segment. We benefited from excellent product-led growth in North America in 2025 in products such as kiwis and citrus in particular. Our export teams have demonstrated excellent operational performance, particularly through efficient management of the evolving cherry marketplace during early 2025, and once more at the start of this latest cherry season.

Looking ahead, we anticipate the delivery of a good result for this important export season overall. Looking out further into the year, we expect to deliver underlying growth in 2026, complemented by enhanced efficiencies from the Dole Diversified North America Haddafi integration. We also expect growth in our joint venture businesses within this segment. With that, I will hand you over to Jacinta to give the financial review for the fourth quarter and full year.

Jacinta Devine: Thank you, Rory, and thank you all for joining our webcast. Firstly, turning to the financial highlights on Slide 10. Overall, our key performance metric, adjusted EBITDA, came in at £72.7 million, which was ahead of our own expectations for the quarter. Compared with Q4 2024, revenue was £2.4 billion and was 9.2% higher on a reported basis and 5.7% higher on a like-for-like basis, due to positive operational performance across all our segments. This growth followed the trend seen over the course of 2025, with full-year revenue increasing 8.2% to £9.2 billion. In the fourth quarter, net income increased to £6 million from a loss of £31.6 million in the prior year.

The prior year was impacted by a loss of £61.2 million in the discontinued Fresh Vegetables division. On a full-year basis, net income decreased to £82 million from £143 million, reflecting a number of non-operational and non-cash items. Net income was lower due to a larger loss from discontinued operations as well as non-cash fair value losses on financial instruments, a non-cash discrete tax charge, and impairment charges on certain assets excluded from the Fresh Vegetable sale. 2024 also had the benefit of the gain on the sale of Progressive Produce.

Looking now at the non-GAAP performance measures, fourth quarter adjusted EBITDA was modestly lower by £1.9 million compared to the prior year. The reduction was primarily driven by higher food costs in Fresh Fruit. This decrease was partially offset by an excellent performance in our Diversified Fresh Produce Americas and Rest of World segment and favorable impact from foreign currency translation. For the full year, adjusted EBITDA came in at $395 million, which was ahead of our latest guidance and 1% ahead of 2024. Adjusted net income decreased £1.5 million in the fourth quarter, predominantly due to the decrease in adjusted EBITDA as well as higher depreciation expense, partially offset by lower interest expense.

For the full year, adjusted net income decreased £5.9 million to £115 million, and full-year adjusted diluted EPS was $1.20 versus $1.27 in 2024.

Turning now to the divisional updates and starting with Fresh Fruit on Slide 12. Revenue increased 6.7% due to higher volumes of bananas sold as well as higher pricing of bananas, pineapples, and plantains, partially offset by lower volumes of pineapples and plantains sold. The decrease in adjusted EBITDA in the quarter was due to higher sourcing costs of bananas, pineapples, and plantains, partially offset by higher commercial cargo profits. Now looking at Diversified Fresh Produce in EMEA, reported revenue increased 12.7% primarily due to a favorable impact from FX as well as strong underlying performance in our operations in Spain, France, and South Africa. On a like-for-like basis, revenue increased 4.5% or $41 million.

Adjusted EBITDA was in line with Q4 2024, with increased earnings in Scandinavia, Ireland, and Spain, as well as a favorable impact from FX translation, partially offset by lower underlying earnings in the UK and the Netherlands. On a like-for-like basis, adjusted EBITDA decreased by £3.5 million in the quarter.

Finally, Diversified Americas had another very strong quarter. Revenue increased 5%, driven by growth in most commodities sold in the North American market, along with growth in Southern Hemisphere export products, primarily driven by higher cherry volumes and higher blueberry pricing. Adjusted EBITDA increased £3.2 million, driven by improved profitability in our joint venture businesses as well as by earnings growth in our Southern Hemisphere export business, driven particularly by the higher cherry volumes. On a like-for-like basis, adjusted EBITDA increased £4.1 million.

Now turning to Slide 15. We remain focused on capital allocation and managing our leverage and are pleased that we were able to close out the year at a comfortable level, coming in at 1.5x, a reduction from 1.6x in the prior year. Interest expense has continued to decrease due to lower debt levels as well as lower base rates and came in at £66.5 million for the full year, in line with our latest guidance. Under the assumption that base rates will remain broadly stable in 2026, we expect full-year interest for 2026 to be approximately $60 million. Net cash provided by operating activities was £123 million in 2025.

As anticipated, we saw a positive inflow in working capital in the fourth quarter, albeit curtailed this year by the strong volume and revenue growth being seen across the business. In addition, Q4 2024 benefited from accentuated seasonal inflows, which will not repeat to the same extent this year. Cash capital expenditure was £28.4 million for the quarter, and we added a further £700,000 of assets by way of finance leases. For the full year, routine CapEx was in line with our latest guidance of £85 million. Cash capital expenditure was £121.5 million, including the buyout of two vessel finance leases for £36 million that was already reflected in our net debt at the end of 2024.

In addition, we added a further £16 million of assets by way of finance lease. Also included within the overall CapEx number was £16 million of expenditure related to the Honduran farm rehabilitations, which was covered by insurance proceeds. For 2026, we are forecasting routine CapEx of approximately £100 million, which is broadly in line with our annual depreciation charge. Free cash flow from continuing operations was £1.7 million for the full year. Excluding the buyout of the vessel finance leases, the Honduran farm rehabilitation supported by insurance proceeds, tax on sale of assets, and the final repatriation tax payment in April, this rises to $81 million.

Looking ahead to 2026, we expect to see normalized cash generation, driven by the benefits of the disposal of the Fresh Vegetable business as well as by lower working capital investments and lower tax payments. Finally, we are pleased to declare an $0.085 dividend for the fourth quarter and, following on from the authorization of a $100 million share repurchase program in November, we purchased 300,000 shares at an average price of $15.15 post year-end and for a total consideration of $4.5 million. Now I will hand you back to Rory, who will discuss our outlook for 2026.

Rory Byrne: Thank you, Jacinta. We are very pleased with our operating results for 2025, delivering adjusted EBITDA of $395 million, which, as I said earlier, came in ahead of our expectations. The result is a testament to the experience and scale of our management teams and people right across the group, as we navigated a year of macroeconomic uncertainty and many other industry-specific factors. We have made important strategic steps forward during 2025, particularly completing the sale of the Fresh Vegetables business, and today our business is well placed, with strong operational momentum across the group.

With this platform, we are targeting growth for the coming financial year, and at this very early stage of the year, we are targeting adjusted EBITDA of at least $400 million. Our presentation sets out our key strategic priorities for 2026, and these are: firstly, executing on our development pipeline while maintaining a disciplined approach to capital allocation; continuing our focus on cost control and delivering operating efficiencies across the group; positioning ourselves to work efficiently in this dynamic macroeconomic and regulatory landscape; and, as ever, strengthening our position in our core business areas and categories.

I want to conclude by once again thanking all our outstanding people across the group for their ongoing commitment and dedication to driving our business forward, particularly in light of the complexities faced by us this year. As always, we really appreciate all our essential partners, suppliers, customers, and all other stakeholders for their continued support. With that, I will hand you back to the operator to open the line for questions.

Operator: We will now begin the question-and-answer session. If you would like to ask a question, please raise your hand now. If you have dialed in to today's call, please press 9 to raise your hand, and 6 to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Christopher Jayaseelan Barnes with Deutsche Bank. Your line is now open. Please go ahead. Just as a reminder, please make sure you are unmuted to ask a question. Thank you very much. Sorry about that.

Christopher Jayaseelan Barnes: Rory, could you elaborate on some of the major puts and takes embedded in your 2026 outlook? Demand trends appear robust, but fruit sourcing costs continue to be a challenge, especially with the dollar weakness and supply pressures last year. It would be helpful to hear a little more about the cost programs you alluded to, whether you see opportunity to take incremental pricing to combat some of this inflationary pressure, and then some further detail around how you see industry supply and demand shaping up over the course of the year. Thanks.

Rory Byrne: Thank you, Christopher. Guidance has become increasingly difficult to get the crystal ball out and predict what is going to happen in the next month, let alone in the next year. What we tend to do is look back over the last few years, and I think the base year we are working from, 2024, we had an absolutely exceptional performance, particularly in Fresh Fruit, and when we have a profitable year, we take it, but unfortunately that sets a high benchmark to try to maintain or grow from. Thankfully, we look back at 2025 and we managed to achieve that, so the sum of the parts for the three operating divisions did exceed our very strong 2024 number.

It is very early in the year to guide. Certainly, the supply dynamics that we referred to in the script remain. There is a complex supply dynamic, and we are hoping our own Honduran production will come back over the course of this year and gradually get into full production for next year. We are back up and running, but not fully. There are other dynamics like Chiquita's exit out of Panama and reentry that will take some time to come in, and weather issues in Central America, particularly in Colombia, have put a lot of pressure on the exit price out of Colombia and driven up sourcing costs. They are continuing a little bit.

We have been going through negotiations. We cannot get into specifics on price, but we are having constructive and sensible dialogue with all of our customers to reflect all of those underlying dynamics. We put all of that into the mix. We also have an exceptionally strong performance in our Americas Rest of the World business, and again it is a bit like 2024 in our Fresh Fruit business. We take it when it is there, and when the market dynamics are good and the supply-demand is good, we take it, but it necessarily sets the benchmark on which the level of growth we achieved was substantial in 2025 on the Diversified Americas division.

It is very early in the year. I think there will be a little bit of a shift in the weighting of the profit streams over the course of the quarters, with it being a little bit more heavily weighted towards the back half of the year as well. So early in the year, some factors out there are putting a little bit of pressure on us, lots of positives as well, so we have set the target at a minimum of $400 million for the year, Christopher.

Christopher Jayaseelan Barnes: Got it. That is helpful context. And then just one follow-up for Jacinta on cash flow. You mentioned normalized cash generation, but how should we think about the level of conversion relative to the at least $400 million of EBITDA? Do you think you can get back to historical 50% plus conversion, or is that more realistic for 2027 and beyond? Thanks.

Jacinta Devine: Thanks, Chris. As I explained earlier on the call, there were some nonrecurring and seasonal items which impacted free cash flow in 2025, and we expect something more normalized in 2026. Generally, we have said free cash flow conversion of between 30%–35% over the longer term. We have outperformed that, Chris, you are quite right, over the last few years. We are targeting more normalized levels, maybe not as strong as we saw last year with a particularly strong inflow at the end of last year, so that makes the comparison a little bit more challenging, but 30% to 35% is the number we generally recommend people consider for the longer term.

Christopher Jayaseelan Barnes: Okay. Thank you very much. I will pass it on.

Operator: Your next question comes from the line of Pooran Sharma with Stephens. Your line is now open. Please go ahead.

Pooran Sharma: Hi. Good morning, and I appreciate the question. Congrats on the results. I just wanted to maybe start off on guidance and dive in a little bit deeper. I was wondering if you could run through the set of factors that maybe get you to either range. You are targeting at least $400 million, so I was wondering what gets you to a higher end. I know you are not saying something explicit, but the higher end of your plan and the set of factors or circumstances that gets you there, and maybe what keeps you more at $400 million.

Rory Byrne: I think I have tried to answer Chris's question and give you the overall backdrop to how we determined the very early guidance. We have a number of important seasons in the Diversified Americas division, such as the cherry season. Pricing has been a little bit weaker, but I think with our volume flow, we have probably done okay. That is a key season as we get to the end of the year, and the supply-demand around some of the other products from grapes to deciduous have all been very positive in 2025. We will have to see how that emerges over the course of this year.

We have a number of key projects underway where we integrate our marketing activities in North America with the previously named Dole Direct North America, integrated with our OPI subsidiary in North America, and there is a bit of work to do to maximize efficiencies in that, but we are hopeful that it can develop well in the medium term. In Europe, particularly Southern Europe and indeed in Northern Europe as well, we have had lots of rains, so that has affected some of the production areas in Southern Europe, probably affected the impact of demand in things like food service, with people not eating out as often as previously.

With some extremely bad weather, you are seeing in North America some weather conditions. We would hope that those kinds of weather impacts, while they might have some impact in the first quarter, tend to balance out over the course of the year. And then on the banana business, it is a little bit early. Our own Honduran production will come fully on stream over the course of the year, and some price modifications will filter in over the course of the year. We hope we do not have any issues around disruptions to shipping schedules. At the $400 million mark.

Pooran Sharma: Maybe just around the Ecuador port asset sales. I am wondering, if you were to monetize the business today, how does this—

Rory Byrne: It is an asset that has been within the whole food company for quite a long number of years, probably developed during a phase where it needed to be developed to improve our export position. We have found a leading operator—professional, serious, dedicated—and we believe that they can run the port and take advantage of the port in a better way from a commercial point of view than we could do on our own. We think it will be fairly neutral from a cost point of view. In terms of operations, we have entered into a use agreement that will be based on market cost structures and will leave us pretty much line ball in terms of cost.

I think the capital allocation is very important. It is a very good business we are exploring. We significantly upgraded our facility to enhance the automation of our processes for our supply and delivery to our main retail customer in Scandinavia. We think that can be a very good model to even give us a strategic advantage, and we can find investments that at least beat the buyback alternative or are positive.

James O'Regan: We can seek inclusion into some of the smaller S&P indices and some of the MSCI indices. It is an important part of our information. We are there and we qualify for inclusion, so we will just be working with the indices and seeking to get in there. We believe we should be in a position to join the S&P 600, so we will work towards that initially. And we are already in the Russell Index.

Peter Thomas Galbo: Great. Okay. Thanks very much, guys.

Operator: Thank you, Peter. There are no further questions at this time. I want to now turn the call back to Rory Byrne, CEO, for closing remarks.

James O'Regan: Thank you very much.

Rory Byrne: I think we can look back at 2025 with a great degree of satisfaction at the operating level. We certainly had some strong operating performance, with great contributions from all three of our divisions. We have made significant strategic progress in 2025. We believe we are well positioned to continue to grow in 2026. Thank you all for joining us today, and we look forward to the year progressing positively.

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