0001802974-26-000022
SEC filingMission Produce reported a net loss of $0.7 million attributable to the company for Q1 2026, compared to net income of $3.9 million in the prior-year quarter. Net sales declined 17% year-over-year to $278.6 million, primarily driven by a 30% decrease in per-unit avocado sales prices in the Marketing & Distribution segment, partially offset by a 14% increase in avocado volume sold. Gross profit remained flat at $31.6 million, but gross margin improved 190 basis points to 11.3% due to higher volumes and improved per-unit margins in Marketing & Distribution. Operating income decreased to $2.5 million from $9.3 million in Q1 2025, impacted by $7.0 million in transaction advisory costs related to the Calavo merger. The company used $3.0 million in operating cash flow and ended the quarter with $44.8 million in cash and cash equivalents.
Mission Produce reported mixed Q1 2026 results with revenue declining 17% year-over-year to $278.6 million but gross margin expanding 190 basis points to 11.3%. The company recorded a net loss attributable to Mission Produce of $0.7 million, compared to net income of $3.9 million in Q1 2025. Operating income decreased to $2.5 million from $9.3 million, significantly impacted by $7.0 million in transaction advisory costs related to the Calavo merger. Basic and diluted earnings per share were both -$0.01, compared to $0.06 and $0.05 respectively in the prior-year quarter. The company used $3.0 million in operating cash flow during the quarter.
Revenue declined across most segments, with the Marketing & Distribution segment experiencing a 21% decrease to $234.8 million. This was driven by a 30% decline in per-unit avocado sales prices, partially offset by a 14% increase in avocado volume sold due to higher yields from Mexico. The Blueberries segment grew 12% to $40.8 million, benefiting from both higher prices (9% increase) and volume (3% increase). International Farming revenue increased 50% to $3.0 million. Geographically, U.S. sales accounted for 75% of total revenue at $209.9 million, while international sales represented 25% at $68.7 million. By product type, avocados comprised 79% of sales ($220.9 million), blueberries 15% ($40.8 million), mangos 5% ($12.9 million), and other products 1% ($4.0 million).
Gross profit remained flat at $31.6 million year-over-year despite the revenue decline, resulting in gross margin expansion from 9.4% to 11.3%. This improvement was driven by higher volumes and improved per-unit margins in the Marketing & Distribution segment. However, Blueberries segment margins were pressured by lower per-acre yields resulting in higher per-unit fruit production costs. Selling, general and administrative expenses increased 31% to $29.1 million, primarily due to the $7.0 million in transaction advisory costs for the Calavo merger. Excluding these costs, SG&A would have been relatively stable. Operating margin declined to 0.9% from 2.8% in the prior-year quarter. The effective tax rate was 110.0% due to book losses in jurisdictions where either a full valuation allowance has been recorded or where loss carryforward is disallowed.
The company used $3.0 million in operating cash flow during the quarter, compared to $1.2 million used in Q1 2025. Working capital increased due to higher trade receivables associated with higher volumes and timing of sales, as well as inventory growth from cultivation of growing crop inventory. Investing activities used $11.8 million primarily for avocado orchard development, packhouse construction in Guatemala, and blueberry plant cultivation in Peru. Financing activities used $4.4 million, including net borrowings on the revolving credit facility of $5.0 million and principal payments on various debt obligations. The company ended the quarter with $44.8 million in cash and cash equivalents, down from $64.8 million at the beginning of the quarter. Total assets were $997.7 million with total liabilities of $377.6 million, resulting in shareholders' equity of $586.9 million.
The company entered into an Agreement and Plan of Merger with Calavo Growers on January 14, 2026, with the transaction expected to close in the third fiscal quarter of 2026. The $490 million consideration will be financed by a combination of Mission Produce equity, new long-term debt borrowings, and cash on-hand. The company expects total capital expenditures of approximately $40 million for fiscal 2026, allocated primarily to International Farming and Blueberries segments. Management noted that the Blueberries segment experienced lower per-acre yields resulting in higher per-unit fruit production costs. The company adopted a shareholder rights plan on January 21, 2026, in response to increased ownership by an activist investor. Several legal proceedings are ongoing, but no loss contingencies have been accrued as amounts cannot be reasonably estimated.