Q3 2025 Dole PLC Earnings Call
Speaker #1: Welcome to Dole plc's third quarter 2025 results webcast. Today's conference is being broadcast live over the internet and is also being recorded for playback purposes.
Speaker #1: Currently, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. For opening remarks and introductions, I would like to turn the call over to the head of investor relations with Dole plc, James O'Regan.
Speaker #2: Thank you, Derek. Welcome, everybody, and thank you for taking the time to join our third quarter 2025 results webcast. Joining me today are our Chief Executive Officer, Rory Byrne; our Chief Operating Officer, Joanne Linden; and our Chief Financial Officer, Jacinta Devine.
Speaker #2: Joining this webcast, we will be referring to presentation slides to supplement our remarks and these, along with our earnings release and other related materials, are available on the investor relations section of the Dole plc website.
Speaker #2: Please note our remarks today will include certain forward-looking statements within the provisions of the Federal Securities Safe Harbor Law. These reflect circumstances at the time they are made, and the company expressly disclaims any obligation to update or revise any forward-looking statements.
Speaker #2: Actual results or outcomes may differ materially from those that may be expressed or implied due to a wide range of factors, including those set forth in our SEC filings and press releases.
Speaker #2: Information regarding the use of non-GAAP financial measures may be found in our press release, which also includes a reconciliation to the most comparable GAAP measures.
Speaker #2: With that, I am pleased to turn today's call over to Rory.
Speaker #3: Thank you, James, and welcome, everybody, and thank you all for joining us today as we discuss our results for the third quarter of 2025 and provide an update on our latest developments.
Speaker #3: So, turning firstly to the highlights on slide four, we are very pleased to report another good result for the third quarter in line with market expectations.
Speaker #3: Our two diversified fresh produce segments have delivered excellent results, offsetting the anticipated short-term headwinds in our fresh fruit segment and demonstrating the strength of our diversified and resilient business model.
Speaker #3: As discussed on our last earnings call, we completed the sale of our non-core fresh vegetable division in early August. This was a key strategic priority for us, and it created greater flexibility in our capital allocation strategy.
Speaker #3: As part of that, the evolution of this capital allocation strategy today, we also announced our board of directors approval of a $100 million share repurchase program, which will be used opportunistically.
Speaker #3: We continue to see attractive opportunities to deploy capital supporting our strategic growth, and adding the buyback program provides flexibility to repurchase shares. The share price represents an attractive opportunity to enhance shareholder value.
Speaker #3: Turning now to the operational review, starting with fresh fruit on slide six. Firstly, I'm very pleased to update you all on an exciting new milestone for the fresh fruit business: the launch of our new Dole Collateral Royale pineapple.
Speaker #3: Bringing this product to the market is the culmination of 15 years of dedicated research and development at our own research facilities and farms in Honduras.
Speaker #3: The collateral royale is our first new pineapple variety in many years, developed through conventional non-GMO breeding to deliver a distinctive and new flavor and appearance for the tropical category.
Speaker #3: While volumes remain low for now, the collateral royale is already selling at a material premium delivering high margins on a per box basis while also stimulating excitement for the category.
Speaker #3: The launch also provides us with a competitive edge for a wider tropical portfolio and we continue to invest in complementary products including plantains, limes, and mangoes.
Speaker #3: Importantly, the launch also reinforces our commitment to community and purpose with a portion of every box sold supporting the creation of a new community center for the farm workers and families in our Honduran pineapple region, delivering healthcare, training, and language services.
Turning firstly to the financial highlights on slide 10.
Overall result for the third quarter with the head of our own expectations.
Revenue of 2.3 billion was 10.5% higher on the reported basis and 8% higher on a like, for like basis, reflecting the continued good underlying growth across each of our segments.
Net income was lowered due to a loss of 10 million in just continued operations, driven by a loss of exposing of the fresh vegetables business.
There was also an Associated non-cash, fair value charge of 8 million on 6th after excluded from the sale.
Is recognized in the period increases related to fair value, adjustments of financial instruments and higher earnings in equity method Investments.
Now looking at the non-gaap performance measures adjusted Eva decreased 1.3 million, the decrease was primarily due to decreases in fresh fruit. Partially obsessed by strong performances in both Diversified segments.
Adjusted net income decreased 3, million predominantly due to the decrease in adjusted Eva as well as higher depreciation expense.
Partially off by lower tax expense.
Adjusted diluted EPS was $0.16 compared to $0.19 in the prior year. Turning now to the divisional update, starting with fresh fruit on July 12th.
Revenue increased 11% primarily due to higher volumes and pricing of bananas pineapples and plantains on a worldwide basis.
As anticipated, higher sourcing costs for bananas were the major driver of our decrease in adjusted EBITDA in this quarter.
In the quarter, we also experienced higher food sourcing costs in pineapples and plain plantains as well as lower profits in commercial cargo.
Now turning to Diversified Mia, who delivered? Another excellent Road from the third quarter continuing with strong performance. Seen over the course of this year
Reported Revenue increased 11% primarily due to strong underlying performance in Scandinavia Spain and the Netherlands as well as a 57 million. Favorable impact from FX partly offset by any negative impact from m&a of 9 million.
Excluding these impacts on a like, for like basis, Revenue increased 6% or 15 million dollars.
Adjusted to either be increased by $10 million or 34%, driven by higher earnings in Scandinavia, Spain, the Netherlands, and South Africa, as well as a favorable impact from FX translation.
On a like for like basis, it just to do the da increased 24% or 7 million.
Diversified Americans also had a very strong third quarter Revenue, increased 8%, or 30 million driving. This increase with Revenue growth in most Commodities. So those of the North American Market, but particularly in TVs and very
Adjusted EBITDA increased by $4 million, or 466%, driven by strong performance in the Southern Hemisphere export business, primarily due to positive final liquidations from the prior export season, as well as continued good performance in the North American market.
My attorney's cash flow and capital allocation.
Cash capital expenditure was $20.9 million for the quarter, along with an additional $7 million of assets required under finance leases.
The combined total included expenditure on Honduras, Farm 3 little patient project which was covered by Insurance property, allowance Logistics and Warehouse investments in Mia and ongoing reinvestments in other farming and transportation infrastructure.
As we get closer to year-end, we are using a full year expectation of the routine capital expenditure to approximately $85 million, with the reduction mainly due to the timing of the execution of certain projects.
This routine capital expenditure excludes. The rehabilitation costs of our farms in Honduras, which we estimate to be approximately 25 million dollars and which will be covered by Insurance processes.
In line with our typical seasonal working capital Trend. We started to see the unwind of the material working capital bills from the first half albeit somewhat curtailed this year by the strong volume and revenue growth being seen across the business.
The combination of these factors resulted in free cash flow from continuing operations of $66.5 million for the quarter.
In keeping with previous years, we do accept expect that the online and working capital was significantly increased as we head towards the end of the year.
as discussed previously, we disposed to refresh vegetable business at the beginning of August and this resulted in an inflow of 68 million and was an important contributor to the reduction in net debt to 664 Million by quarter end,
We are pleased to declare a late $0.05 dividend for the third quarter, which will be paid on January 6th to shareholders on record as of December 9th.
Now, I will hand you back to Rory, who will give an update on our 4-year outlook and provide further details on our go-forward capital allocation strategy.
Economic volatility continues, and some industry-specific factors may influence our results, including the current supply and demand conditions for bananas. However, the momentum within the overall business gives us confidence that our full year adjusted EBITDA should be at the upper end of our targeted range of $380 million to $390 million.
In summary our sector and indeed our position within the sector gives us ample opportunity to grow and generate strong returns per shareholders. The announcement today of the 100 million buyback program. Provides another lever for driving long-term sustainable shareholder value and our presentation slide include further detail on our overall Capital allocation framework.
I want to conclude by once again thanking all our outstanding people, right across the group, for their ongoing commitment and dedication to driving Dole PLC forward. In particular, this quarter I would like to give special mention to our pineapple team, both on their search and production side in Latin America, and also our sales and marketing teams in North America, who have delivered on a long-term vision to bring new and innovative products to the market with those collateral royal. As always, I really appreciate all our essential partners, suppliers, customers, and all our other stakeholders for their continued support. And with that, I'll hand you back to the operator to open the line for questions.
We will now begin the question and answer session. If you would like to ask a question, please raise your hand. Now, if you have dialed into today's call, please press star, 9, to raise your hand and star 6, to amuse. Please stand by while we compare the Q&A roster.
Your first question comes from the line of Christopher Barnes with Deutsche Bank. Your line is now open. Please go ahead.
Hi, good morning, good afternoon. Thanks for the question. Um, I guess I'd just like to start on the implied outlook for the fourth quarter, and I appreciate that forecasting in this environment is an imperfect exercise, to say the least. But could you just elaborate on the key drivers of...
Uh, the, the implied 10% decline at the upper end of, of the annual Eva dog guidance. It just seems that cost versus price mismatches in in fresh fruit, and mainly bananas are the biggest contributor, especially given the volume momentum. You've enjoyed here to date. So,
um, I just love, love more color, around the fourth quarter, and then just thinking about 2026 like
Um, should we should we expect that these cost pressures continue into the into into 2026 or is annual Contracting? Um,
Is the progression on pricing in your favor, or is there some other offset, whether through your sourcing or easier comparisons from less tight industry supplies? I'd love your perspective on the fourth quarter and then into 2026. Thanks.
Thanks Chris for the, the question, you know. Obviously as you say, you know, guidance and this uh like volatile macroeconomic environment becomes increasingly challenging and um, you know, I I think another factor and we've highlighted previously but perhaps not in the current quarter. Um you can't forget that we really had an excellent 2024. So it's had an incredibly High Benchmark for us going into 25. We highlighted some of the specific headwinds that we had ourselves uh, in Honduras. Um, and yes, there has been some EXA exacerbation of those with with industry-wide problems. We've seen problems in Panama. We've seen problems in Costa Rica and that has had quite a significant impact on the spot price and uh, coming out of Ecuador and that's impacted on our, our procurement costs when we've had to, to reorganize some of our procurement. So we definitely see some of those, um, those headwinds continuing into Q4, which is probably a factor in arriving at the guidance but you know, we're
I'm, I'm guidance.
Yeah. Yeah, no very helpful. And then I just a quick follow-up on, on the topic of tariffs into the US. Um, I know it's it's a different each time we speak but we have seen some evidence of Select exclusions for certain agricultural products in the last couple of months. So, uh, with that in mind, is there anything new to share, um, from your in the broader produce industry's efforts to secure exclusions for tropical produce um that that you can't grow commercially in the US. Thanks.
No, we have nothing new to share on that Chris. I mean, starting to principle that, uh, products that cannot be commercially grown within the US should be excluded from the Tariff scenario is clearly established by the US Administration. I think it's just taking a little bit of time to convert that principle into practical realities. And, you know, obviously there's a lot of moving Parts, particularly at this moment in time around the whole tariff equation. So I think over time, you know, clearly our industry is a good example of international trade. Um, you know, the US, I think wants people to be able to have access to healthy products and not fully year around basis and you know, particular tropical produce such as bananas and pineapple. So what it meant my my my take a little bit of time to change, you know, we are confident that over the, you know, over a sense of a period of time, you know, it should be positive over there, there should be positive changes but
There's no specific news, just at the moment to update you on that, on that front.
Fair enough. Thank you very much. Thank you, Chris.
Your next question comes from the line of Gary Martin with Davey, your line is now open. Please go ahead.
Hi Roy. Uh, congrats.
Gary your line is now open. Please go ahead. Thank you.
Hello, can you hear me there?
Got you now, perfect, perfect, perfect. Uh, I'll say it again. Congrats on a strong set of results. Just a few quick ones from me. I think maybe the most pressing 1 would be just around the the capital allocation of the big announcement there around the authorization of 100 million aggregate buyback. It'd just be good to get your, uh, your kind of 2 cents on your kind of thinking behind the, uh, the the buyback program, and how that plays into the rest of your Capital, allocation policy. And maybe just as, as an add-on, how you kind of think about leverage going forward?
Yeah, thanks Gary. So I think we said, you know, for a long time that we had a big strategic overhang in terms of the the potential future. I'd come on our um discontinued operation the the vegetable division that would previously had. So we had said very clearly that we wanted to wait to get the to to to to get an outcome on that. And we're very happy with the
Outcome with us, it did give us Clarity around the focus on our our 3 main operating divisions. And it did give us Clarity in terms of, um, being able to be more definitive Definitive or and definitive around our Capital allocation strategy. So we, we wanted to have, uh, if you like, um, the tool and the tool kit in terms of having the, the the buyback capacity available, um, we certainly believe that there are plenty of opportunities. You know, whether it's smaller or larger opportunities to grow within our individual divisions. And, you know, we're not going to ignore those opportunities. In terms of, you know, what is capital development? Projects are small, bolt-on, Acquisitions in particular, certainly some of the bigger bigger Acquisitions. Um, the valuation multiples are still probably a little bit too high, so we'll be patient on that front. Um, I think in general terms you know having a progressive dividend policy combined with the buyback program uh and combined with plenty of
Uh, capital investment opportunities. Um, I think we're now well positioned in terms of having set up our capital allocation strategy in a good and clear way for the investment community.
Uh, into the long term.
Yeah, I mean, we've we've we've, we've plenty of Investments, uh, underway. And obviously, if we undertake some guy, we try to try to try to make them a sticky as possible. So, you know, we've done a number of, you know, smaller in the overall scheme of things investment and some of our distribution capability, even in terms of non fresh fruit products and, and they're coming through in a very, very positive way. We're constantly exploring the potential for even further automation of our very significant facilities, um, and our interaction with our, some of our key customers in that region. And and that, you know, is something that's, that's a non-government
If you look around the different divisions, then fresh fruit. You know, we highlighted things like plantains or limes where we have been expanding our presence and control, uh, our access to the product. We're probably doing a little bit more looking at it a little bit more on the organic space to make sure that we have, you know, the demand, you know, particularly both in Europe and North America continues to be strong for certain customers in the organic space. And, you know, we want to make sure that we have the right mix between third-party and controlled, uh, production and that, and maybe a little bit of rebalancing in terms of the sourcing capabilities that we have across the different geographies in Latin America and South America on the fresh fruit side. Um, the Diversified Americas business, you know, we're expanding our handling cap,
Ability in particularly products like cherries. Um, you know, we're broadening our core base in there and interacting with some key partner producers in that region as well. So and then it's some of other smaller Investments earn in the group b. It in Ireland, upgrading our facilities, Spain and enhancing our avocado ripening capability. France developing our our banana ripening capabilities in in in set in France, so lots of projects um and lots of development opportunities so I hope that covers the question you had um Gary very thoroughly. Um I maybe just have 1 final 1 at a tiny bit more anorak but um maybe just 1 for, I just sent you even just around the reduction in routine capex. Uh you may have lost over in your uh preferred remarks which would be good to dive into the the kind of nature of the reduction in in routine capex and whether you expect that to be, you know, a kind of around the 85 million level when you go for basis.
Uh, hi Gary. Yeah, the reduction is just really timing, you know, as as we're now in in in almost the middle of November, we can see that our ability to complete some of the projects that we had targeted. Um is is is we're we're we're we're going to if be unlikely that we'll get there before the end of the year. So that really uh why we've called it back? We would expect those projects to be completed in in in 2026.
I suppose we should interpret those going forward. You know, typically, we've always said that we'd like to um,
Have run our normal routine. Capex design with our depreciation, which is just over $100 million. So that's the sort of long-term number. Now, obviously, there can be opportunities outside of that, uh, that maybe those of this year, we have the best of um, that we acquired at the start of the year. But in normal terms, um, around Islam without appreciation, just about anything.
Thanks, I'll pass it on. Thanks for the answers.
Your next question comes from the line of pin Sharma with Stevens. Your line is now open. Please go ahead.
Once again, your question comes from the line of Pulver and Sharma with Stevens. Your line is now open. Please unmute yourself and go ahead.
Hi there. Can you hear me now?
Yes.
Okay, great. Sorry about that. Um,
Uh appreciate the the question here. Um, just wanted to maybe get a sense of how your negotiations with your customers have been going so far. Um in in annual Contracting season. I know you said it was too early but um you know you mentioned in in past years if Supply condition
S tight Supply conditions persist um that the industry generally tends to to adjust itself. So was just wondering if you can maybe just give us a little bit more qualitative granularity in regards to how some of your negotiations uh with your customers have been fairing so far this season.
I I was just going to say exactly like what you said there, Rory that it's it's too early and we are right in the middle of it.
Uh, but, uh, considering the supply situation, we believe it's well understood within the markets because it's been very well. Uh, it's been impacting everyone, with the Panama being shut down that took out a sizable volume. Honduras having the weather last year took out sizable volume, and now Costa Rica is also having weather issues. So, we believe the customers are aware of the situation, and we feel that the discussions that we are having in the negotiations with the retailers are always very tough. But we also believe that we are getting our story across. So, we feel optimistic about the future.
Okay, great. Um, I appreciate the color there.
And um, was just maybe wondering if if you could kind of talk more about some of the strengths that you're you're seeing in in in the Diversified uh fresh produce and maybe just focusing on a Mia here. I know you gave some color with with the last questions you've made some solid uh Investments but in terms of like the underlying drivers, the consumer health and and those areas was just wondering if you're able to to share a little bit more color in regards to the uh, performance you've seen thus far.
Yeah, I I think on an overall basis, you also have to recognize the strengths of our business in the Diversified segment. Um, you know, in the May of you look across the European countries where the number 1 player in Ireland in the UK in Spain, Czech Republic, Sweden, Denmark a strong presence in Germany, Netherlands, France, Italy. So we've got a really really well-oiled machine in Europe, and we've got a really strong platform to build with our existing customer base across all of the segments from retail to wholesale to food service. And I think with our, you know, the combination, if you go back in time even though we are not very much all just 1 dual PLC but there was a process of integrating the, the strengths of the doe food company and total produce. And I think we're seeing a lot of the benefits of of that coming through and giving us a, a much more comprehensive package of offering to the major.
Customers across the different markets. Um, we've been, you know, working very hard to consolidate our activities particularly in, you know, fra in Holland and Northern Europe. Um, we've been developing in in France with a hugely strong platform in Spain that we've this year. For example, we opened our uh avocado ripening facilities, where do branding a range of exotic products and it's getting a lot of positive traction with our customers.
Um, Scandinavia. We've always had a very, very strong position in the marketplace and, you know, we're building on that, um, with our core activities and, you know, adding in, uh, additional interesting aspects to it. Um, you know, North America. Then, if you look at the, the fresh, the Diversified, um, business in North America, you know, strong platform with our our office businesses as a platform and the marketing, uh, as the marketing front for, but our other businesses, um, you know, whether it's gambles in Toronto or fresh connection. Export businesses, as well, have been have been working hard. And then, as we said in the call, um, we had some difficulties going back, a few years with the, uh, the pandemic period and the, the supply chain disruption was quite difficult on our South American businesses. Um, you know, we've regrouped in a very positive way, um, and now we've got a strong platform to build on, you know, we're looking at, you know, some expansionary activity and in Chile and Peru, um, you know, Argentina Argentina.
Continues to be difficult, but we're, you know, performing well and focusing on certain products. So I think, all in all, the streamlining of the Dome Direct North American business into AI is another.
Step in the direction of making our businesses more efficient and, you know, making ourselves more attractive to our key customers.
So, I hope that gives you a high level overview of it brand.
And Rory may maybe that's 1 1, 1 thing to add, there is that we see also very healthy consumer demand, it seems the the consumer is focusing on affordability, the focusing on health, they're going to the channels where we are representing our products so we seem to be in a good spot right now.
Great, great. Appreciate the call and congrats on the quarter.
Thank you for.
Your next question comes from the line of Peter. Galbo with Bank of America, your line is now open. Please go ahead.
Hey, hey, good morning guys. Can you hear me? Okay.
Great. Uh, thank you for the questions, maybe just to go back to to Chris Barnes and his question, um, around tariff. And, and to ask it in a slightly different way, just what, what was embedded, um, in the guidance this year, the 3839 in terms of overall tariff hit, and, and I asked it in the context. Of, if we do get relief for the Supreme Court, tosses out, you know, aipa tariffs, what, whatever it's going to be just, what's kind of the, the, the flow through of of what was embedded in. This year's guidance relative to what could be a potential Tailwind for next year.
Yeah, I we didn't build in any particular positive, or negative into the guidance for this year. Um, you know, we've been working our way through, it, very carefully with our customer and our supply base. Um, and clearly, I think, uh, if if, for some reason, the tariffs got on wound that would just be a pass through in some way, so we wouldn't get any particular benefit and hopefully not not suffer any particular negative. Um, so it's more that I think, the key Point really and Chris's question was more about the, you know, the long-term issues that clearly uh, are industry, is not the specific targets of tariffs. And we hope over time that that comes through in in in a realignment of the Tariff approach.
Got it helpful. And then I I know it's it was a again, a relatively short-term um hiccup maybe here in in the fourth quarter, but um, wanted to ask about snap and just whether there was any real implications or or issues, you saw even in the first, you know, 10 days of this month. Um, particularly around fresh fruits and vegetables. I'd have to think some of those have have some snap exposure, so, um, just whatever you saw. And again, if we get resolution today, could could be a nice Tailwind, but, um, kind of what you saw in the very, the very short term. Thanks very much.
Uh, Johan, do you want to comment on that in terms of the government shutdown impacts as well? Yeah. So uh, what we, we have not seen any Trends out of the shutdowns. We only have anecdotal stories, uh, coming back from the market and what people are saying. Is that in the areas where there are a lot of government employees that have seen, some, a slight decrease of sales in the stores,
Uh and maybe that they have been moving a little bit more to Affordable products and there we just want to remember that. We are very affordable products with many of the products we have, especially the bananas.
And anecdotally, the people also saying that maybe they see that some consumers in these areas are moving to more.
What is perceived to be inexpensive formats? Like discount stores. And again, we are represented across all channels. So for us uh we we feel that we are in a good position but again no real Trends. It's only stories coming back from the market.
Helpful. Thank you.
There are no further questions at this time. I will now turn the call back to Rory, Byrne for closing remarks.
Thank you, Derek. So yeah, we're very pleased, you know, that our broadly based business model has yet again performed. Well in the quarter and we've made some good operational and strategic project progress over the course of 25. I think so all the fresh vegetable business that did clear the path to give us. Um, you know, much more clarity of focus and strategic focus on our key 3, 3 key operating divisions and indeed the financial flexibility to put in place the 100 million buyback program and add to our investment investor. Uh, shareholder value toolkit so overall we believe a well positioned to continue to successfully progress over the next few years and thank you very much for joining us today.
This concludes today's call, thank you for attending. You may now disconnect