Group 1 - Shares of Mission Produce, Inc. (AVO) have lost 5.1% over the past week, but a hammer chart pattern formed in the last trading session suggests potential support and a trend reversal [1] - The hammer pattern indicates a nearing bottom with likely subsiding selling pressure, which is a technical bullish signal [2] - There is strong agreement among Wall Street analysts in raising earnings estimates for AVO, enhancing its prospects for a trend reversal [1][3] Group 2 - The consensus EPS estimate for AVO has increased by 143.8% over the last 30 days, indicating a positive trend in earnings estimate revisions [3] - AVO currently holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks, which typically outperform the market [3] - The Zacks Rank of 1 for Mission Produce serves as a strong indicator of potential trend reversal, helping investors identify improving company prospects [3]

Group 1 - Mission Produce, Inc. (AVO) has shown a year-to-date return of approximately 32.4%, outperforming the average return of 8.9% for the Consumer Staples sector [2] - The Zacks Rank for Mission Produce, Inc. is currently 1 (Strong Buy), indicating a positive earnings outlook with a 150% increase in the full-year earnings estimate over the past quarter [2] - Mission Produce, Inc. is part of the Agriculture - Operations industry, which has seen a decline of about 8.1% this year, further highlighting AVO's strong performance relative to its industry [3] Group 2 - British American Tobacco (BTI) has also performed well, with a year-to-date return of 29.3% and a Zacks Rank of 2 (Buy) [3] - The Tobacco industry, which includes British American Tobacco, has experienced a positive movement of +30.3% since the beginning of the year, ranking 10 in the Zacks Industry Rank [3] - Investors are encouraged to monitor both Mission Produce, Inc. and British American Tobacco for their continued solid performance in the Consumer Staples sector [4]

Core Viewpoint - Mission Produce, Inc. has experienced significant stock performance, with a 27.6% increase over the past month and a 32.4% gain since the beginning of the year, outperforming both the Zacks Consumer Staples sector and the Zacks Agriculture - Operations industry [1] Financial Performance - The company has consistently exceeded earnings expectations, reporting an EPS of $0.23 against a consensus estimate of $-0.01 in its latest earnings report on September 9, 2024, and beating revenue estimates by 40.93% [2] - For the current fiscal year, Mission Produce is projected to achieve earnings of $0.45 per share on revenues of $1.1 billion, reflecting a 136.84% increase in EPS and a 15.01% increase in revenues [2] - The next fiscal year forecasts earnings of $0.29 per share on revenues of $991.1 million, indicating a year-over-year decline of 35.56% in EPS and 9.66% in revenues [2] Valuation Metrics - The stock currently trades at 29.7 times the current fiscal year EPS estimates, which is above the peer industry average of 21.5 times [4] - On a trailing cash flow basis, the stock trades at 22.1 times compared to the peer group's average of 7.8 times, suggesting it may not be in the top tier from a value perspective [4] Style Scores and Zacks Rank - Mission Produce holds a Value Score of B, with Growth and Momentum Scores of A, resulting in a combined VGM Score of A, indicating strong performance across these metrics [3] - The company has a Zacks Rank of 1 (Strong Buy), supported by favorable earnings estimate revisions from analysts, suggesting potential for further gains [5]

Core Viewpoint - The article emphasizes the importance of identifying and maintaining stock price trends for successful short-term investing, highlighting the utility of a "Recent Price Strength" screening strategy to find stocks with strong fundamentals and upward momentum [1]. Group 1: Stock Performance - Mission Produce, Inc. (AVO) has shown a solid price increase of 33.3% over the past 12 weeks, indicating strong investor interest [2]. - AVO has also maintained a price increase of 26.6% over the last four weeks, confirming that the upward trend is still intact [2]. - The stock is currently trading at 93.4% of its 52-week high-low range, suggesting it may be on the verge of a breakout [2]. Group 2: Fundamental Strength - AVO carries a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [3]. - The Zacks Rank system has a strong historical performance, with Rank 1 stocks generating an average annual return of +25% since 1988 [3]. - The Average Broker Recommendation for AVO is also 1 (Strong Buy), indicating high optimism from the brokerage community regarding its near-term price performance [3]. Group 3: Investment Strategy - The article suggests that AVO is not the only stock that meets the criteria of the "Recent Price Strength" screen, encouraging investors to explore other stocks that fit this profile [4]. - It highlights the availability of over 45 Zacks Premium Screens tailored to different investing styles, which can help identify potential winning stocks [4]. - The Zacks Research Wizard tool allows backtesting of stock-picking strategies, enhancing the effectiveness of investment decisions [4].

Core Insights - The avocado market continues to thrive, with the U.S. importing a record 2.8 billion pounds from Mexico in the previous year, highlighting the fruit's growing popularity and investment potential [1] Company Overview: Calavo Growers - Calavo Growers Inc. is a leading player in the fresh produce industry, specializing in avocados and other products like tomatoes and Hawaiian papayas [2] - The company operates as an asset-light business, partnering with farmers for sourcing while maintaining packing facilities in Mexico [3] Financial Performance: Calavo Growers - For fiscal Q3 2024, Calavo reported an EPS of 57 cents, exceeding analyst expectations by 14 cents, with revenues increasing 11.7% YoY to $179.6 million [4] - The Grown segment saw a 13.3% YoY net sales increase to $163.2 million, driven by strong avocado margins despite supply disruptions [4] Dividend Strategy: Calavo Growers - The Board of Directors has doubled the cash dividend to 20 cents per share, with the next payment scheduled for October 30, 2024 [5] - The company plans to reinvest proceeds from the sale of its Fresh Cut segment into its core avocado and guacamole businesses [5] Company Overview: Mission Produce - Mission Produce Inc. was initially focused solely on avocados but has since diversified into mangos and blueberries, optimizing production across different seasons [7][8] - The company operates a vertically integrated model, owning farms in multiple countries and managing its own distribution network [9] Financial Performance: Mission Produce - Mission Produce reported fiscal Q3 2024 EPS of 23 cents, surpassing expectations by 20 cents, with revenues rising 24% YoY to $324 million [10] - Adjusted EBITDA increased by 49% YoY to $31.5 million, with international farming revenues at $27.4 million [10] Market Outlook: Mission Produce - The company anticipates flat to slightly lower industry volumes for the remainder of fiscal 2024, transitioning to a Mexico-centric sourcing model [12] - Pricing is expected to decrease sequentially but remain 15% higher YoY, with blueberry harvest season beginning in fiscal Q4 [12]

Core Insights - Higher avocado prices significantly boosted Mission Produce's fiscal Q3 results, leading to a 19.3% increase in stock price [1][3] - Despite a 10% year-over-year decline in avocado sales volume, a 36% increase in avocado prices resulted in a 24% revenue growth, surpassing expectations [2] - Management anticipates a decrease in avocado prices in Q4, although they will remain higher than the same period last year, which is expected to support revenue [2] Financial Performance - Mission Produce reported an operating income of $37 million through the first three quarters of its fiscal year [4] - The company's stock is trading at approximately 1 times sales, indicating a fair valuation despite market volatility [4] Market Outlook - The unpredictability of produce prices due to external factors can impact business results and stock performance, necessitating investor comfort with volatility [4] - Sales volume for blueberries is expected to grow, but lower prices may hinder their contribution to revenue growth [2]

Core Viewpoint - Mission Produce, Inc. has reported solid financial results, including an EPS of $0.23 and revenue of $324 million, but faces significant challenges ahead [1][5][15] Company Overview - Mission Produce, Inc. is a leading player in the global avocado industry, fully integrated from sourcing to distribution, and has expanded its product offerings to include mangos and blueberries since 2021 [3] - The company operates packing facilities in the U.S., Mexico, and Peru, and has a distribution network across North America, China, and Europe [3] Financial Performance - For Q3 FY2024, Mission Produce achieved a revenue growth of 24% year-over-year to $324 million, with adjusted EBITDA rising 49% to $31.5 million [5] - The company reported a gross profit increase of $8.6 million to $37 million, with improved margins due to strong avocado sales [5] Market Dynamics - The company faced lower avocado production in Peru due to El Niño, but higher prices helped offset this decline, maintaining strong demand [6] - Mission Produce captured a record market share of approximately 30% in California, significantly increasing its cash flow [7] Technological Advancements - Mission Produce has developed "Mission Control," a precision ripening technology that improves quality consistency by 38% and reduces food waste [9] - The company is expanding its ripening capacity in the UK and rolling out similar technology for mangos [8][9] Diversification Efforts - The blueberry segment saw net sales increase to $1.6 million, while mango volumes rose by 40%, doubling revenue to $14 million [10] Cash Flow and Efficiency - Mission Produce generated close to $30 million in free cash flow and saved $2.5 million through operational efficiency improvements [11] - Planned capital expenditures for 2024 are projected to be between $40 million and $45 million, indicating a focus on efficient resource use [11] Risks and Challenges - The company faces a 40% drop in sales volume from owned farms in the International Farming segment due to lower harvest yields [14] - Negative earnings growth and a high P/E ratio raise concerns about the stock's valuation and future performance [13][15]

Financial Data and Key Metrics Changes - Revenue for Q3 2024 increased by 24% year-over-year to a record $324 million, driven by a 36% increase in avocado sales prices [6][13] - Adjusted EBITDA rose by 49% to $31.5 million compared to $21.2 million in the previous year [6][15] - Operating cash flow improved by $62.7 million year-to-date versus the prior year period, showcasing strong execution [6][20] Business Line Data and Key Metrics Changes - Marketing and Distribution segment net sales increased by 25% to $321.3 million, primarily due to higher avocado pricing [15][16] - International Farming segment net sales decreased to $27.4 million from $38.2 million, with adjusted EBITDA remaining relatively flat at $4.6 million despite a 40% reduction in owned farm sales volume [17][18] - Blueberry segment net sales slightly increased to $1.6 million, with adjusted EBITDA decreasing to $0.1 million [19] Market Data and Key Metrics Changes - The avocado market experienced strong consumer demand, with pricing remaining high due to supply shortages from Peru and Mexico [7][14] - California's avocado harvest yielded over 50% larger volumes than the previous year, allowing the company to capture a record market share of approximately 30% [8][32] Company Strategy and Development Direction - The company is focusing on long-term health and productivity of orchards, with proactive steps taken to mitigate weather-related challenges [9][10] - Expansion plans for the blueberry segment are being accelerated, reflecting the company's commitment to diversifying its product offerings [10] - The UK facility achieved profitability for the first time, indicating successful market penetration and operational refinement [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the return of normalized weather conditions and the potential for improved operational efficiencies [9][24] - The company anticipates flat to slightly lower avocado volumes in Q4 2024, with pricing expected to decrease sequentially but remain higher than the previous year [23][24] - Management highlighted the importance of maintaining a strong balance sheet and prioritizing debt paydown while evaluating future capital allocation opportunities [36][37] Other Important Information - Cash and cash equivalents increased to $49.5 million as of July 31, 2024, compared to $42.9 million at the end of the previous fiscal year [19][20] - Capital expenditures for the nine months ended July 31, 2024, were $25.3 million, with a projected budget of $40 million to $45 million for the fiscal year [21][22] Q&A Session Summary Question: Expectations for the upcoming Peruvian avocado harvest - Management noted that the harvest volume was lower than initially estimated due to extreme heat from El Nino, but higher prices helped offset the impact [28][29] Question: Increase in market share in California - The company achieved close to 30% market share in California due to proactive engagement with local growers and effective management of supply challenges [32][33] Question: Future capital allocation and investments - Management indicated that while the balance sheet is stronger, the focus remains on debt reduction and planned capital expenditures rather than aggressive new investments [36][37]

Financial Performance - Net sales increased by $62.6 million or 24% in the three months ended July 31, 2024, driven by a 36% increase in average per-unit avocado sales prices, despite a 10% decrease in avocado volume sold[86]. - For the nine months ended July 31, 2024, net sales increased by $184.3 million or 26%, primarily due to a 28% increase in average per-unit avocado sales prices[87]. - Gross profit for the three months ended July 31, 2024, increased by $8.6 million or 30% to $37.0 million, with a gross profit percentage of 11.4%[93]. - Gross profit for the nine months ended July 31, 2024, increased by $41.2 million or 74% to $96.7 million, with a gross profit percentage of 11.0%[94]. - Operating income for the three months ended July 31, 2024, was $16.8 million, compared to $11.0 million for the same period last year[84]. - Net income attributable to Mission Produce for the three months ended July 31, 2024, was $12.4 million, compared to $6.6 million for the same period last year[84]. - The company recorded a net income of $12.1 million for the three months ended July 31, 2024, compared to a net income of $6.2 million for the same period last year[114]. Expenses and Costs - Selling, general and administrative (SG&A) expenses increased by $2.8 million or 16% in the three months ended July 31, 2024, primarily due to higher employee-related costs[96]. - Interest expense was flat at $3.2 million for the three months ended July 31, 2024, compared to the same period last year, while it increased by $1.6 million or 19% to $9.9 million for the nine months ended July 31, 2024, primarily due to rising interest rates[100][101]. - The provision for income tax increased by $2.2 million or 96% to $4.5 million for the three months ended July 31, 2024, primarily due to higher income before taxes[108]. Segment Performance - The International Farming segment's exportable volume is expected to be 50% to 60% lower than the prior year due to warmer temperatures affecting harvest yields[92]. - Mango revenue increased by $15.8 million or 58% compared to the same period last year, driven by higher average sales prices and volume sold[87]. - Blueberry revenue increased by $11.2 million or 34%, due to a 66% increase in average per-unit sales price, despite a 19% decrease in volume sold[87]. - The company experienced a significant increase in net sales in the Marketing and Distribution segment, which rose by $179.3 million or 27% for the nine months ended July 31, 2024, driven by avocado and mango pricing and volume increases[115]. - Total segment sales in the International Farming segment decreased by $10.8 million or 28% for the three months ended July 31, 2024, primarily due to lower volumes of owned avocados sold[117]. - Segment adjusted EBITDA for the International Farming segment decreased by $0.3 million or 6% in the three months ended July 31, 2024, largely offset by higher sales prices and cost savings measures[117]. - Net sales in the Blueberries segment increased by $11.2 million or 34% for the nine months ended July 31, 2024, driven by a 66% increase in average per-unit sales price[119]. - Segment adjusted EBITDA for the Blueberries segment improved to $9.5 million for the nine months ended July 31, 2024, compared to a loss of $(0.2) million in the same period last year[119]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was $55.4 million for the nine months ended July 31, 2024, compared to cash used of $7.3 million in the same period last year[122]. - Capital expenditures for the nine months ended July 31, 2024 totaled $25.3 million, down from $47.0 million in the same period last year[125]. - The company expects capital expenditures for fiscal 2024 to be between $40 million to $45 million[134]. - Estimated remaining capital expenditures for the Moruga Blueberry Project were approximately $35 million as of July 31, 2024[135]. Financial Position - As of July 31, 2024, cash and cash equivalents were $49.5 million, an increase from $42.9 million as of October 31, 2023[131]. - As of July 31, 2024, the consolidated leverage ratio was 1.25 to 1.00, in compliance with financial covenants[133].

Year-to-date momentum continues with ongoing strength of the Marketing & Distribution segment Operating cash flow for the first nine months of fiscal 2024 increased by $62.7 million versus the prior year period OXNARD, Calif., Sept. 09, 2024 (GLOBE NEWSWIRE) -- Mission Produce, Inc. (Nasdaq: AVO) (“Mission” or the “Company”), a world leader in sourcing, producing, and distributing fresh Hass avocados with additional offerings in mangos and blueberries, today reported its financial results for the fiscal thi ...