Mission Produce's Q1 hit by industry-wide rising costs and declining volumes
Avocado and mango company Mission Produce experiencing a disappointing first financial quarter that was affected by industry-wide rising costs and declining volumes.
However, said the company boosted revenues and was able to maintain its market share during the quarter and gain two significant customers.
During the quarter ended Jan. 31, 2022, the company reported a 25 percent uptick in revenue to US$216.6 million, impacted by average selling price increases of 50%, partially offset by an 18% decrease in avocado volume sold, compared to the same period last year.
But it registered a net loss in the period of $13.4 million, compared to net income of $2.2 million in the same period last year.
First quarter 2022 results were negatively impacted by several factors, including rapidly rising fruit costs and transportation rates and declining volumes across the industry, the company said.
These challenges were amplified by enterprise resource planning (“ERP”) system implementation issues which prevented a quick response to these issues, it said.
“We are disappointed in our fiscal first-quarter performance where we experienced greater than anticipated operational challenges associated with our ERP system conversion on November 1, 2021," said Steve Barnard, Founder and CEO, Mission Produce.
"The ERP implementation caused certain operational issues that temporarily limited our ability to manage our business and operations efficiently and eroded our ability to drive the per-unit margins that we have historically generated.
"We believe the most acute challenges we faced in the first quarter have been largely addressed.
He went on to say that while this was a difficult transition, it was a "necessary infrastructure upgrade to ensure that we have the systems and capabilities in place to manage our ever-growing global presence" – in terms of new sources of supply and the expanding global customer base– for many years to come.
"Despite the ERP implementation challenges, we were able to maintain our market share and fulfill our customer commitments," he said.
"In fact, not only did we retain all our customers during the quarter, but we were able to gain two additional significant customers who will represent meaningful additional volume for the business in the future.
"We are confident in our ability to execute on our strategic growth plans as we continue to put the challenges we faced with the implementation behind us.”