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Mission Produce Q3 outlook hinges on expected avocado price recovery
The company said its fiscal Q1 gross margin rose 190 basis points even as avocado prices fell 30%, and it projects a seasonal improvement in the second half.
Mission Produce is preparing for its Q3 results with much of the focus on whether avocado prices rebound, after a supply glut from Mexico pressured sales. The company derives about 85% of revenue from avocados, and it said the first half was hurt by falling prices rather than weak demand.
According to Yahoo Finance, Mexico drove the pricing headwinds as the country expanded its crop, and Mexico accounts for roughly 80% of total avocado imports to the US. The outlet noted that avocado exports to the US jumped 35% year over year in the first four months of the year, while Mission’s volumes rose 14% in Q1 and 15% in Q2.
Mission reported that average avocado prices fell 30% in Q1 FY2026, with revenue down 17%, followed by another 36% pricing decline in Q2 ended April, when revenue declined 24%. Yahoo Finance also highlighted that fiscal Q1 gross margin expanded 190 basis points despite the price drop, arguing the business can absorb swings better than headlines suggest.
The outlook also factors in seasonality, with the second half expected to benefit from Mission’s record Peruvian harvest and management guidance that the company views as upbeat. Yahoo Finance said the stock is trading at 11.9 times forward EV/EBITDA, implying about $16.50 a share, roughly 29% above current levels.