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Investing.com – Mission Produce stock (NASDAQ:AVO) plunged more than 10% in Thursday’s premarket trading as the avocado producer’s fourth-quarter sales and earnings both fell short of estimates owing to multiple headwinds.
Total revenue was up 15% at $237 million as higher prices of the fruit outweighed the fall in volumes sold. The company blamed lower volumes on delayed start of the Mexican harvest season combined with the lingering effects of a smaller Californian crop. Cargoes from Peru partially offset the supply crunch but port congestion led to some late-season inventory being spoiled.
Upheavals in the supply chain and smaller average fruit size led to lower freight utilization, compressing gross margins by 4.8 percentage points to just over 14%.
Expenses incurred on a new facility at Laredo in Texas also weighed on margins.
Selling, general and administrative expense fell owing to IPO-related expenses booked in the same period last year.
Adjusted net profit fell around 22% to $17 million because of higher cost of sales.
For the ongoing quarter, Mission Produce chose to give the industry outlook, according to which, volumes could be flat to slightly down on a year-on-year basis. Prices in the industry could go up by as much as 40% from a year ago, the company said.
