Mission Produce Reports 28% Increase in Net Sales but Decline in Profitability for Q2 Fiscal 2025

Mission Produce, Inc. reported its financial results for the second quarter of fiscal 2025, revealing a significant increase in net sales but a decline in profitability compared to the same period last year. For the three months ended April 30, 2025, the company achieved net sales of $380.3 million, a 28% increase from $297.6 million in the prior year. However, net income fell to $3.0 million, down from $7.0 million, reflecting a decrease in gross profit margin, which dropped to 7.5% from 10.4%. The decline in profitability was attributed to increased costs associated with supply chain disruptions and tariffs, as well as lower per-unit margins on avocados.

The company's Marketing & Distribution segment was the primary driver of revenue growth, with sales rising 26% to $362.5 million. This increase was largely due to a 26% rise in average per-unit avocado prices, although sales volumes remained flat due to ongoing constraints on Mexican fruit availability. In contrast, the International Farming segment saw a substantial increase in sales, up 479% to $2.1 million, driven by higher pricing and yield from mango orchards. The Blueberries segment also contributed to growth, with sales increasing 57% to $15.7 million, primarily due to higher volumes from expanded acreage.

Operationally, Mission Produce faced challenges that impacted its financial performance. The company incurred $1.5 million in costs related to the closure of its Canadian distribution centers, which were part of a strategic move to optimize its supply chain. Additionally, the company experienced $1.1 million in tariffs on imports from Mexico during a brief period in March 2025, which further pressured margins. The overall gross profit for the quarter decreased by 8% to $28.4 million, reflecting these operational challenges.

Looking ahead, Mission Produce remains cautious about the macroeconomic environment, particularly regarding potential changes in U.S. trade policies and their impact on costs. The company is actively monitoring regulatory changes and strategizing to align its pricing strategy accordingly. Despite the current challenges, Mission Produce continues to focus on expanding its market presence and optimizing its operations to enhance profitability in the future. The company reported total assets of $1.01 billion as of April 30, 2025, with a total equity of $584.3 million, indicating a solid financial foundation as it navigates these challenges.