Mission Produce reports 19% growth in Q2 avocado volume
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| 13 June 2023
Overview of avocados in the U.S. market, complemented by charts from Agronometrics. Original published on June 9, 2023.
While Mission Produce Inc. saw 19% growth in avocado volume sold in the second quarter of 2023 compared to the same period last year, its total revenue decreased 20% to $221.1 million compared to that period in 2022 — declines driven by deflationary pressure on avocado sales prices as a result of robust Mexican harvest volumes, the company said in its quarterly earnings report for the fiscal period ending April 30, 2023.
“Our fiscal second quarter performance was driven by improved sales volumes resulting from a more normal pricing environment versus last year’s record high pricing,” Steve Barnard, CEO of Mission Produce, said in a news release. “We delivered a 19% increase in sales volumes year over year, and we continued to see sequential improvement in both volumes and per-unit margins relative to fiscal first quarter.”
The Oxnard, Calif.-based company that sources, produces and distributes fresh hass avocados with additional offerings in mangoes and blueberries reported a 36% decrease in average per-unit avocado sales prices that it says was partially offset by an increase in avocado volume sold of 19%, both of which were driven by higher industry supply out of Mexico during the current quarter as compared to limited supply out of Mexico in the same period last year.
Gross profit decreased $1.7 million in the second quarter of fiscal 2023 compared to the same period last year, to $18.1 million, while gross profit percentage increased 110 basis points, to 8.2% of revenue, according to the release. Mission says gross profit was affected primarily by the mix of volume from source regions, which favored Mexico this year, whereas the prior year period was advantaged by the positive influence from an earlier California harvest and higher per-unit sales prices.
Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)
“We are optimistic that per unit margins will continue to improve on a sequential basis and support the normal seasonal step-up in adjusted EBITDA in the second half of the fiscal year,” Barnard said. “Despite the impact of lower prices on per unit margins in the short-term, a more rational pricing environment is advantageous for long-term consumption growth and allows Mission to leverage our global distribution footprint to penetrate new growth markets.”
Mission Produce further reported that its owned production in Peru has begun its seasonal harvest and expects total exportable production from 125 million to 135 million pounds.
“We are well positioned as we enter the Peruvian season and our owned production comes online in the second half of the fiscal year,” Barnard said.
The company, which is celebrating its 40th anniversary, also has begun operations at its new forward distribution center in the United Kingdom.
“Our focus remains on driving consumption growth globally by bringing consistent, year-round diversified sourcing capabilities to new growth markets,” Barnard said. “On that note, we are excited about the opening of our forward distribution center in the U.K. in April. Although still early, we are pleased with the progress we are making in the U.K. and are committed to further developing our capabilities in this important long-term growth region.”
Looking ahead, Mission Produce says it expects volumes to be approximately 20% higher in the fiscal 2023 third quarter versus the prior-year period, primarily due to the combination of California’s harvest shifting to the third quarter versus the second quarter last year, a strong Peruvian harvest outlook and a larger off-bloom Mexican harvest.
The company says pricing is expected to be consistent on a sequential basis, but lower on a year-over-year basis by approximately 35% to 40% compared with the $2.03 per pound average experienced in third quarter of fiscal 2022.
The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.
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