As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the perishable food industry, including Mission Produce (NASDAQ: AVO) and its peers.

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 3.6% while next quarter’s revenue guidance was 2.7% above.

While some perishable food stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.5% 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 $357.7 million, up 10.4% year on year. This print exceeded analysts’ expectations by 11.7%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ gross margin estimates.

Steve Barnard, CEO of Mission, stated, "This quarter, our commercial team demonstrated its unique ability to effectively program our owned Peruvian production to strategically deliver fruit into multiple global regions, resulting in supply consistency for our consumers and another quarter of strong financial performance. Our vertically integrated model, which combines a year-round sourcing network, owned production, global marketing and distribution capabilities and value-add services allows Mission to provide category leadership to drive global consumption. What's particularly encouraging is how our operations have adapted to market volatility — we've now demonstrated our ability to deliver solid results whether facing difficult supply conditions or favorable harvest environments, reflecting the consistency and operational excellence that helps us navigate various headwinds and capitalize on opportunities as they arise. With our strong operational performance and continued focus on working capital management, we generated $34 million of operating cash flow during the third quarter and expect to build on this in the fourth quarter as we sell the balance of our owned-crop inventory."

Unsurprisingly, the stock is down 7.5% since reporting and currently trades at $11.90.

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 $184.8 million, up 25.4% year on year, outperforming analysts’ expectations by 8%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates.

Vital Farms pulled off the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 25.3% since reporting. It currently trades at $46.76.

Is now the time to buy Vital Farms? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: 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 $178.8 million, flat year on year, falling short of analysts’ expectations by 8.4%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and gross margin estimates.

As expected, the stock is down 2.5% since the results and currently trades at $26.80.

Read our full analysis of Calavo’s results here.

Tyson Foods (NYSE: TSN)

Started as a simple trucking business, Tyson Foods (NYSE: TSN) is one of the world’s largest producers of chicken, beef, and pork.

Tyson Foods reported revenues of $13.88 billion, up 3.6% year on year. This result surpassed analysts’ expectations by 2.9%. It was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.

The stock is up 5.8% since reporting and currently trades at $55.57.

Read our full, actionable report on Tyson Foods here, it’s free.

Fresh Del Monte Produce (NYSE: FDP)

Translating to "of the mountain" in Spanish, Fresh Del Monte (NYSE: FDP) is a leader in providing high-quality, sustainably grown fresh fruits and vegetables.

Fresh Del Monte Produce reported revenues of $1.18 billion, up 3.8% year on year. This print beat analysts’ expectations by 2.2%. Overall, it was an exceptional quarter as it also put up a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.

The stock is down 1.9% since reporting and currently trades at $35.37.

Read our full, actionable report on Fresh Del Monte Produce here, it’s free.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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