Rising avocado sales helped Mission Produce turn a profit in the second quarter of 2021 after posting a loss a year earlier.
The Oxnard-based avocado distributor generated earnings of $7.4 million, or 10 cents per diluted share, for the quarter ended April 30, the company announced on June 10. In the same quarter last year, Mission had a net loss of $14.8 million, or 23 cents per diluted share.
The bulk of this improvement could be attributed to a 22% rise in avocado sales by volume, thanks in part to a large crop from Mexico this year.
With that rise, the company produced $234.7 million in revenue in the second quarter, 6% more than the same quarter last year.
“Our blue-chip customer base and the flexibility that our network provides allowed us to distribute 22% greater volume than the prior year,” CEO Steve Barnard said during the company’s earnings call. “With our vertical integration and key intelligence, we are in an excellent position to continue to grow our leadership position.”
Mission Produce released its earnings after the trading day closed on June 10, with its stock price closing at $21.88. The stock closed 3.7% higher on June 11, at $22.69.
The stock has climbed 89% since Mission went public in October at $12 per share.
Avocado pricing is still down 14% over the past year, Mission said, but Barnard is confident the company will be able to continue to show profits in the third quarter as more Americans buy avocados.
“Avocado consumption generally peaks during the summer, with over half the U.S. households purchasing fruit between June and August,” he said.
Mission CFO Bryan Giles said the company expects similar avocado pricing over the final two quarters of the year.
“The assumptions that we made in our model as we look into Q3 and Q4 is that pricing will continue at a similar run rate to what we saw in Q2,” he said.
While Mission cannot control avocado prices, Giles said the company has leveraged its “global presence” to overcome the current low prices.
Net sales in the marketing and distribution segment increased 6% year-over-year to $232.4 million in the most recent quarter, while international farming segment sales increased 79% to $4.3 million.
In the second half of the fiscal year, Barnard said the company will look to rely more on its international farming segment, especially its farms in Peru.
“The growing season was very productive, and we’re expecting solid yields from our crop. And with prices firming up, we’re in a great position to deliver a strong second-half operating performance, led by our international farming segment,” Barnard said.
Mission also announced that its newest distribution center in Laredo, Texas, is expected to be operational by the end of Sept. 2021. Mission completed construction of the 262,000-square-foot building in April.
“We’ve been working through our operational qualification process and finishing up the internal systems that will make this a game-changer for our North American customers,” Barnard said. “Beyond North America, our ambitions are global.”
Mission finished the quarter with cash and cash equivalents $54.2 million, down from $124 million since the company first went public.