Q2 Earnings Recap: Mission Produce (NASDAQ:AVO) Tops Perishable Food Stocks
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Mission Produce (NASDAQ:AVO) and the rest of the perishable food stocks fared in Q2.
The perishable food industry is diverse, encompassing large-scale producers and distributors to specialty and artisanal brands. These companies sell produce, dairy products, meats, and baked goods and have become integral to serving modern American consumers who prioritize freshness, quality, and nutritional value. Investing in perishable food stocks presents both opportunities and challenges. While the perishable nature of products can introduce risks related to supply chain management and shelf life, it also creates a constant demand driven by the necessity for fresh food. Companies that can efficiently manage inventory, distribution, and quality control are well-positioned to thrive in this competitive market. Navigating the perishable food industry requires adherence to strict food safety standards, regulations, and labeling requirements.
The 11 perishable food stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 5.7%.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Luckily, perishable food stocks have performed well with share prices up 11.9% on average since the latest earnings results.
Best Q2: Mission Produce (NASDAQ:AVO)
Founded in 1983 in California, Mission Produce (NASDAQ:AVO) grows, packages, and distributes avocados.
Mission Produce reported revenues of $324 million, up 23.9% year on year. This print exceeded analysts’ expectations by 40.3%. Overall, it was an incredible quarter for the company with an impressive beat of analysts’ earnings and gross margin estimates.
“We are pleased to report another quarter of strong financial performance, marked by robust third quarter revenues of $324.0 million, an increase of 24% year-over-year and a 49% increase in adjusted EBITDA to $31.5 million,” stated Steve Barnard, CEO of Mission.
Mission Produce achieved the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 16.8% since reporting and currently trades at $12.50.
Is now the time to buy Mission Produce? Access our full analysis of the earnings results here, it’s free.
Vital Farms (NASDAQ:VITL)
With an emphasis on ethically produced products, Vital Farms (NASDAQ:VITL) specializes in pasture-raised eggs and butter.
Vital Farms reported revenues of $147.4 million, up 38.5% year on year, outperforming analysts’ expectations by 6.5%. The business had a stunning quarter with an impressive beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 10.8% since reporting. It currently trades at $38.50.
Is now the time to buy Vital Farms? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Cal-Maine (NASDAQ:CALM)
Known for brands such as Egg-Land’s Best and Land O’ Lakes, Cal-Maine (NASDAQ:CALM) produces, packages, and distributes eggs.
Cal-Maine reported revenues of $785.9 million, up 71.1% year on year, exceeding analysts’ expectations by 11.5%. Still, it was a slower quarter as it posted a miss of analysts’ earnings estimates.
Interestingly, the stock is up 16% since the results and currently trades at $89.20.
Read our full analysis of Cal-Maine’s results here.
Calavo (NASDAQ:CVGW)
A trailblazer in the avocado industry, Calavo Growers (NASDAQ:CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.
Calavo reported revenues of $179.6 million, down 30.9% year on year. This print was in line with analysts’ expectations. Taking a step back, it was a mixed quarter as it also logged an impressive beat of analysts’ earnings estimates but a miss of analysts’ gross margin estimates.
Calavo had the slowest revenue growth among its peers. The stock is up 16.7% since reporting and currently trades at $28.05.
Read our full, actionable report on Calavo here, it’s free.
Tyson Foods (NYSE:TSN)
Started as a simple trucking business, Tyson Foods (NYSE:TSN) today is one of the world’s largest producers of chicken, beef, and pork.
Tyson Foods reported revenues of $13.35 billion, up 1.6% year on year. This number beat analysts’ expectations by 1.1%. Taking a step back, it was a satisfactory quarter as it also logged an impressive beat of analysts’ earnings estimates but a miss of analysts’ gross margin estimates.
The stock is down 4.8% since reporting and currently trades at $58.28.
Read our full, actionable report on Tyson Foods here, it’s free.
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