Mission Produce Inc (NASDAQ:AVO) stock plunges 14.39% (As on March 11, 11:18:38 AM UTC-4, Source: Google Finance) after the company reported fiscal first quarter earnings that beat analyst estimates, but margins were pressured by higher fruit costs. The adjusted EBITDA decreased 8% to $17.7 million compared to the same period last year. The company cited lower per-unit gross margins on avocados sold due to challenges in obtaining Mexican supply to meet customer commitments. Total avocado volume sold increased 5% YoY, while average selling prices jumped 25%, reflecting industry supply constraints in Mexico and resilient consumer demand. The company’s blueberry segment saw a 70% increase in volume sold, though average selling prices declined 33%. Higher blueberry volume was driven by increased total acreage and yields from Company farms, while price decreases were driven by a normalization of the supply and demand environment this year, as compared to the prior year’s high pricing that was driven by lower supply following unfavorable regional weather conditions.

Further, the gross profit increased $2.8 million in the first quarter of fiscal 2025 to $31.5 million, compared to the same period last year, driven by the International Farming segment, which benefited from increased packing and cooling service activity that correlated with higher blueberry production volumes, partially offset by lower gross profit in the Marketing & Distribution segment. Gross profit percentage decreased 170 basis points, to 9.4% of revenue. Adjusted net income for the first quarter of fiscal 2025 was $7.1 million compared to $6.7 million, for the same period last year. Adjusted EBITDA was $17.7 million for the first quarter of fiscal 2025, a decrease of $1.5 million or 8% as compared to $19.2 million in the prior year period, driven primarily by lower per-unit gross margins on fruit sold in the Marketing & Distribution and Blueberries segments.

AVO in the first quarter of FY25 has reported the adjusted earnings per share of 10 cents, beating the analysts’ estimates for the adjusted earnings per share of 3 cents. The company had reported the adjusted revenue growth of 29 percent to $334.2 million in the first quarter of FY25, beating the analysts’ estimates for revenue of $272 million.

Mission Produce expects industry avocado volumes in the fiscal second quarter to be consistent with the prior year period. Pricing is projected to be approximately 5% higher YoY. The company maintained its fiscal 2025 capital expenditure guidance of $50 million to $55 million.