Mission Produce Inc. (NASDAQ: AVO) announced a significant increase in revenue and profitability in its third quarter report for fiscal year 2026. The company's revenue reached $450 million, reflecting a 26% increase compared to the same period last year. This growth was primarily driven by increased avocado supply from Mexico and the positive impacts of the merger with Calavo Growers.
Sales Growth and Margin Challenges
During this period, Mission Produce recorded an adjusted EBITDA of $32.4 million, which was above market expectations. However, some business units faced significant weaknesses during this time. The company's management has forecasted that adjusted EBITDA for the fourth quarter will be between $52 and $55 million, which will include potential benefits from the Calavo merger in the first full quarter following this transaction.
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Negative Impacts on Margins
Despite revenue growth, some profitability metrics and underlying margins were concerning during this period. Mission Produce reported an adjusted net income of $15 million, equivalent to $0.18 adjusted EPS, and these figures have decreased compared to last year. Additionally, falling prices along with reduced sales volumes in some sectors led to an adjusted EBITDA of negative $0.1 million in the blueberry segment.
The revenue from the international agricultural segment also reached $45.8 million, down from $49.0 million in the same period last year. This decline was attributed to lower average prices and increased global avocado supply.
For the nine months ending July 31, 2026, operating activities consumed $25.9 million in cash, reversing from the $21.4 million generated in the same period last year. This change is attributed to a combination of declining revenue and costs associated with the Calavo merger.
According to financial institution data, investment trends in Mission Produce stock have stabilized, with 20 investment funds investing in this stock by the end of the second quarter. The short interest ratio of 5.40% indicates a level of skepticism regarding this stock.
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