Can Higher Volumes Offset Mission Produce's Pricing Pressure?

Mission Produce, Inc. AVO is benefiting from robust avocado demand, but sharply lower pricing continues to temper the benefit of higher volumes. In the second quarter of fiscal 2026, avocado volumes sold increased 15% year over year, supported by abundant supply and strong category consumption. However, average per-unit avocado sales prices declined 36% from the prior-year peak-price environment, contributing to a 24% drop in revenues to $290.9 million. Higher volumes therefore provided only a partial cushion against the pricing decline.

The pricing environment also weighed on profitability. An unusually large Mexican crop created excess supply, while a mismatch between available fruit sizes and customer demand forced Mission Produce to purchase certain sizes at higher spot-market prices and discount others to clear inventory. Consequently, gross profit declined to $20.5 million from $28.4 million, while gross margin contracted 50 basis points to 7%. Marketing and Distribution sales also fell to $277.2 million from $362.5 million despite the higher avocado volumes.

Looking ahead, volume trends remain supportive, while the degree of pricing pressure is expected to moderate. Fiscal third-quarter industry avocado volumes are projected to increase 5-10% year over year, while pricing is expected to decline about 15%, a considerably smaller reduction than experienced during the first half. Mission Produce also expects its Peruvian exportable avocado production to reach a record 120-130 million pounds versus 105 million pounds last season. With supply shifting toward California and Peru and per-unit margins expected to improve through the back half, stronger volumes could provide a more meaningful earnings benefit as pricing conditions stabilize.

Volume and Pricing Trends at CTVA & DOLE

Higher volumes are helping cushion pricing and cost pressures for Corteva, Inc. CTVA and Dole plc DOLE, though profitability headwinds remain.

Corteva is also navigating a mixed volume-pricing environment. In the second quarter of 2026, Crop Protection sales declined 4% as a 4% pricing decrease and 2% volume decline more than offset favorable currency movements. However, the first-half picture was more encouraging, with Crop Protection volumes increasing 2%, helping offset a 3% decline in pricing. Along with productivity actions and favorable currency, the improved volumes contributed to a 9% increase in first-half segment operating EBITDA, highlighting the potential for stronger demand to cushion pricing pressure.

Dole's latest results also underscore the importance of volume growth in a challenging operating environment. In the second quarter of 2026, revenues in Diversified Fresh Produce – Americas & ROW increased 13.9%, supported by higher North American volumes, including growth in kiwi and avocados, while segment adjusted EBITDA advanced 33.8%. However, the broader company continued to face pressure from elevated fruit sourcing and shipping costs, particularly in Fresh Fruit, where adjusted EBITDA declined 30.9%. Thus, healthy volume trends are providing support, but cost pressures remain an important constraint on overall profitability.

AVO’s Price Performance, Valuation & Estimates

Shares of Mission Produce have gained 11.5% in the last three months compared with the industry’s rise of 1.7%.

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From a valuation standpoint, AVO trades at a forward price-to-earnings ratio of 18.29X, above the industry’s average of 14.55X.

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The Zacks Consensus Estimate for AVO’s fiscal 2026 earnings suggests a year-over-year decline of 35.44%, while that for fiscal 2027 indicates growth of 66.7%. The company’s EPS estimates for fiscal 2026 and 2027 have remained stable in the past seven days.

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AVO stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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