By Dhirendra Tripathi

Investing.com – Mission Produce stock (NASDAQ:) 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.

The increase in fruit prices outweighed lower volumes. Total revenue rose 15% to $237 million. Company blamed the lower volume on the late start to the Mexican harvest season, as well as the long-lasting effects from a smaller Californian crop. Although the shortage was partly offset by Peruan cargoes and port congestion, some stock from late-season season was spoiled.

Supply chain disruptions and smaller fruit sizes led to lower freight utilization. Gross margins were compressed by 4.8 percentage point to just above 14%. 

Margins were also affected by expenses incurred at Laredo, Texas for a brand new facility.

The IPO-related expenses that were incurred in the same time last year led to a decrease in selling, general and administration expense.

Due to higher sales costs, adjusted net profit dropped by 22% and $17 Million.

Mission Produce has provided the industry outlook for the next quarter. It states that volumes may be slightly lower or flat year-on-year. The company stated that prices could rise as high as 40% in the sector compared to a year ago.