Mission Produce Raises Calavo Synergy Target Above $30 Million
Mission Produce (NASDAQ:AVO) raised its annualized synergy target from the acquisition of Calavo to over $30 million, citing expected savings in SG&A expenses and improved network efficiency. The company reported a 26% revenue increase for Q3 fiscal year 2026 due to higher avocado volume despite a 9% decline in per-unit prices. Gross margin fell by 270 basis points to 9.9%, while adjusted EBITDA remained nearly flat at $32.4 million. The company's Marketing & Distribution segment saw an increase in adjusted EBITDA, driven largely by Calavo’s post-acquisition performance. Mission Produce reaffirmed its second-half adjusted EBITDA guidance of $84–$88 million and expects Q4 results to benefit from a full quarter with Calavo. However, the company faces challenges including lower per-unit prices due to increased supply, integration costs that contributed to a GAAP net loss in the period, and uncertainty around how much synergy savings will translate into quarterly earnings. The bear case highlights declining adjusted EBITDA margins and concerns about whether scale improvements can offset agricultural market volatility.
Tickers: $AVO