Mission Produce misses by $0.23, misses on revs as prices declined rapidly; expects more normal marketplace in 2023
- Reports Q4 (Oct) earnings of $0.13 per share, excluding non-recurring items, $0.23 worse than the S&P Capital IQ Consensus of $0.36; revenues rose 0.4% year/year to $238.0 mln vs the $247.64 mln S&P Capital IQ Consensus.
- Average avocado selling price decreased by 10%, partially offset by a 6% increase in avocado volume sold, compared to the same period last year.
- Co noted that performance was impacted by a confluence of variables, especially with regard to the rapid decline in pricing, which undermined its ability to drive the per-unit margins that it has generated historically.
- Persistent cost inflation, combined with a suboptimal size curve from owned production and, a delay to seasonal transition to the Mexican production resulted in an unfavorable mix, lower relative pricing, and temporary margin compression.
- Co expects a more normal marketplace in 2023, highlighted by better and more consistence supply conditions.
- Co added, "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."
- For FY23:
- 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.
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