Mission Produce, Inc., producer and distributor of fresh Hass avocados with additional offerings in mangos and blueberries, reported its financial results for the fiscal fourth quarter ended October 31, 2022.
Fiscal fourth quarter 2022 highlights:
- Total revenue of $238.0 million was flat with the prior year period. Average avocado selling price decreased by 10%, partially offset by a 6% increase in avocado volume sold, compared to the same period last year.
- Net loss of $(42.0) million, which includes a non-cash charge of $49.5 million related to goodwill impairment; compared to net income of $16.9 million.
- Adjusted net income of $9.2 million compared to $17.0 million for the same period last year.
CEO Message
Steve Barnard, Founder and CEO of Mission Produce commented, “We advanced our position with retailers during fiscal fourth quarter through a successful activation of our Peruvian program. Mission’s ability to deliver consistent, high-quality fruit during the Mexican off-season is a clear advantage of our vertical integration. These capabilities, combined with our expanding network of ripening and distribution assets, provide us with the tools to penetrate new and growing markets in Europe and Asia.”
Mr. Barnard continued, “While we are pleased with the commercial traction we are having with customers for our Peruvian production, our fiscal fourth quarter financial performance was impacted by a confluence of variables, especially with regard to the rapid decline in pricing, which undermined our ability to drive the per-unit margins that we have generated historically. Persistent cost inflation, combined with a suboptimal size curve from our owned production and, a delay to our seasonal transition to the Mexican production resulted in an unfavorable mix, lower relative pricing, and temporary margin compression.
“With respect to 2023, we see a more normal marketplace emerging — highlighted by better and more consistent supply conditions — which provides a constructive foundation for the industry to drive consumption and expand growth in new geographies. We are prepared to meet demand during the upcoming peak Super Bowl season and expect to produce improved operating performance for the full year 2023.”
Full Year 2022 Highlights:
- Total revenue of $1.0 billion, a 17% increase driven by average selling price increases of 28%, partially offset by an 11% decrease in avocado volume sold, compared to last year.
- Net loss of $(34.6) million compared to net income of $44.9 million last year.
- Owned exportable avocado production volume increased 15% to 117 million pounds for the 2022 harvest season.
Outlook
For the first quarter of fiscal year 2023, the Company is providing the following industry outlook:
The industry is expecting volumes to be higher in the fiscal 2023 first quarter versus the prior year period, primarily due to expectations for a larger Mexican harvest. The overall Mexican crop is expected to be approximately 20% higher compared to the prior harvest season, but early season volumes have lagged that figure due to primarily to low pricing.
Pricing is expected to be lower on a sequential basis, but consistent with pricing experienced in the latter part of the prior quarter, which would imply a year-over-year decrease of approximately 20-25% compared to the $1.56 per pound average experienced in first quarter of fiscal 2022.