Dole plc (DOLE) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial performance with increased revenue and EBITDA across segments, despite some challenges. The Q&A section highlights robust demand and strategic initiatives, although there are concerns about fruit sourcing costs and vague management responses. The share repurchase program and positive market trends further support a positive outlook. Given the company's market cap of $1.16 billion, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
Key Financial Performance
Adjusted EBITDA (2025) $395 million, 1% increase year-over-year. Reasons: Strong performance in diversified Fresh Produce segments offsetting higher sourcing costs in Fresh Fruit.
Sale of Fresh Vegetables Business $140 million gross consideration. Reason: Strategic focus on core operating divisions and capital allocation flexibility.
Net Proceeds from Port Operations Sale Approximately $75 million. Reason: Strategic optimization of asset base and operations.
Credit Facilities Renewal $1.2 billion. Reason: Strengthened financial capacity and flexibility for growth initiatives.
Share Repurchase Program $100 million authorized, $4.5 million spent. Reason: Part of capital allocation strategy.
Fresh Fruit EBITDA (2025) $189 million. Reasons: Resilience despite higher sourcing costs and weather-related disruptions.
Diversified EMEA Adjusted EBITDA (2025) $150 million, 14% increase year-over-year. Reasons: Strong contributions from Spain, Nordics, and Netherlands.
Diversified Americas Adjusted EBITDA (2025) 21% increase year-over-year. Reasons: Revenue growth, margin expansion, and joint venture contributions.
Q4 Revenue (2025) $2.4 billion, 9.2% increase year-over-year. Reasons: Positive operational performance across all segments.
Full-Year Revenue (2025) $9.2 billion, 8.2% increase year-over-year. Reasons: Strong operational performance.
Q4 Net Income (2025) $6 million, compared to a loss of $31.6 million in prior year. Reason: Prior year impacted by discontinued Fresh Vegetables division loss.
Full-Year Net Income (2025) $82 million, decrease from $143 million in prior year. Reasons: Non-operational and non-cash items, including tax charges and impairment losses.
Q4 Adjusted EBITDA (2025) $72.7 million, modestly lower by $1.9 million year-over-year. Reasons: Higher fruit costs partially offset by strong performance in Diversified Fresh Produce Americas.
Fresh Fruit Revenue (Q4 2025) 6.7% increase year-over-year. Reasons: Higher banana volumes and pricing, offset by lower pineapple and plantain volumes.
Diversified EMEA Revenue (Q4 2025) 12.7% increase year-over-year. Reasons: Favorable FX impact and strong performance in Spain, France, and South Africa.
Diversified Americas Revenue (Q4 2025) 5% increase year-over-year. Reasons: Growth in North American commodities and Southern Hemisphere exports.
Interest Expense (2025) $66.5 million, decrease from prior year. Reasons: Lower debt levels and base rates.
Net Cash from Operations (2025) $123 million. Reasons: Positive working capital inflow and strong volume/revenue growth.
Cash Capital Expenditure (2025) $121.5 million. Reasons: Routine CapEx, vessel finance lease buyouts, and Honduran farm rehabilitation.
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Operating Highlights
Launch of Colada Royale pineapple: Introduced a new variety of pineapple with a sweeter taste and coconut flavors, developed over 15 years of R&D. It has been well-received by customers and consumers, winning multiple awards, including being voted best new product in the fresh fruit category by Newsweek.
Market expansion in Spain: Strong contributions from product diversification and market expansion, particularly in Canary Island bananas.
Growth in the Nordics: Investments in distribution and logistics capabilities have driven growth in the Nordic region.
Recovery in the Netherlands: Operations in the Netherlands showed a good recovery after challenges in the prior year.
Sale of Fresh Vegetables business: Completed the sale of the Fresh Vegetables division for $140 million, allowing focus on core operations and flexibility in capital allocation.
Sale of port operations in Ecuador: Announced the sale of port operations in Guayaquil, Ecuador, expecting net proceeds of $75 million.
Renewal of credit facilities: Completed a $1.2 billion renewal of credit facilities, enhancing financial capacity for growth initiatives.
Share repurchase program: Approved a $100 million share repurchase program, with $4.5 million spent to date.
Honduran farm rehabilitation: Rehabilitation of farms affected by tropical storm Sara is underway, with full recovery expected later in 2026.
Exit of Castle & Cooke as shareholder: Castle & Cooke exited as a shareholder, improving liquidity and daily trading volumes.
Transition to U.S. domestic issuer filings: Transitioned to U.S. domestic issuer filings, enhancing eligibility for inclusion in U.S. equity indices.
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Risk or Challenges
Elevated sourcing costs: The industry faced elevated sourcing costs for bananas, pineapples, and plantains, leading to lower profitability in the Fresh Fruit segment.
Weather-related disruptions: Tropical storm Sara caused disruptions to Honduran production and supply, impacting produce volumes and competitiveness.
Macroeconomic uncertainty: The company navigated a year of macroeconomic uncertainty, which posed challenges to operations and strategic planning.
Higher fruit costs: Higher sourcing costs for bananas, pineapples, and plantains negatively impacted adjusted EBITDA in the Fresh Fruit segment.
Non-operational and non-cash items: Net income was impacted by non-operational and non-cash items, including fair value losses on financial instruments, discrete tax charges, and impairment charges on certain assets.
Lower pineapple and plantain volumes: Lower volumes of pineapples and plantains sold partially offset revenue growth in the Fresh Fruit segment.
Regulatory and macroeconomic landscape: The company is positioning itself to work efficiently in a dynamic macroeconomic and regulatory environment, which could pose challenges.
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Guidance & Outlook
Fresh Fruit Segment: Produce volumes and competitiveness are expected to improve over the course of 2026 due to targeted investments in production and supply chain cost initiatives. Positive demand tailwinds and investments in cost programs are anticipated to drive profitability improvement as 2026 progresses.
Diversified EMEA Segment: Strong performance is expected to continue in 2026, supported by further development investments across the segment.
Diversified Americas Segment: Underlying growth is anticipated in 2026, complemented by enhanced efficiencies from the Dole Diversified North America and Oppy integration. Growth is also expected in joint venture businesses within this segment.
Interest Expense: Interest expense for 2026 is expected to be approximately $60 million, assuming base rates remain broadly stable.
Capital Expenditures: Routine capital expenditures for 2026 are forecasted to be approximately $100 million, aligning with the annual depreciation charge.
Cash Generation: Normalized cash generation is expected in 2026, driven by the disposal of the fresh vegetable business, lower working capital investments, and lower tax payments.
Adjusted EBITDA: The company is targeting adjusted EBITDA of at least $400 million for 2026.
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Shareholder Return Plan
Dividend Declaration: Declared a $0.085 dividend for the fourth quarter.
Share Repurchase Program: Board approved a $100 million share repurchase program in November 2025. $4.5 million has been spent repurchasing shares to date, with 300,000 shares purchased at an average price of $15.15.
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Key Q&A
Q:Could you elaborate on the major factors in your 2026 outlook, including demand trends, fruit sourcing costs, and cost programs?
A:Rory Byrne explained that guidance is challenging due to unpredictable factors. He highlighted robust demand trends but noted challenges with fruit sourcing costs due to dollar weakness and supply pressures. He mentioned ongoing negotiations with customers to address these dynamics and emphasized a minimum target of $400 million for the year.
Q:How should we think about cash flow conversion relative to the $400 million EBITDA target?
A:Jacinta Devine stated that normalized cash generation is expected in 2026, with a free cash flow conversion target of 30%-35% over the long term. She noted that while past years outperformed, the comparison is challenging due to strong inflows in 2025.
Q:What factors could lead to achieving the higher end of the $400 million EBITDA target?
A:Rory Byrne discussed various factors, including key seasons like the cherry season, supply-demand dynamics for products like grapes, and weather impacts. He also mentioned ongoing projects like the integration of marketing activities in North America and the recovery of Honduran production, which could influence performance.
Q:How does the Ecuador port asset sale impact cost structure and capital allocation priorities?
A:Rory Byrne explained that the sale to TiL is expected to be cost-neutral due to a usage agreement. He outlined capital allocation priorities, including dividends, opportunistic buybacks, investments in automation in Scandinavia, and smaller bolt-on acquisitions.
Q:What is the path to index inclusion following the change to domestic issuer financial reporting?
A:Jacinta Devine stated that most disclosures were already in domestic issuer format, and the company is now focusing on inclusion in indices like the S&P 600 and MSCI. She noted that the company is already part of the Russell Index.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on pricing negotiations and the exact impact of the Ecuador port sale on cost structure. Additionally, responses to questions about index inclusion milestones and achieving the higher end of the EBITDA target were somewhat vague, lacking precise timelines or quantifiable factors.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Colada Royale
Diversified Fresh
Fresh Fruit
Fresh Produce
Fresh Vegetables
Vegetables sale
addition
asset way
benefit investment
business segment
buyout vessel
charge
cherry volume
consideration
contribution
decrease
farm rehabilitation
finance lease
income loss
inflow
milestone
pineapple plantain
port
production supply
profitability
recovery
reduction
rehabilitation insurance
repurchase program
segment increase
share repurchase
tax payment
variety
venture business
vessel finance
webcast
DOLE Transcript
Dole plc (DOLE) Q4 2025 Earnings Call Transcript
Positive2-25
The earnings call reveals strong financial performance with increased revenue and EBITDA across segments, despite some challenges. The Q&A section highlights robust demand and strategic initiatives, although there are concerns about fruit sourcing costs and vague management responses. The share repurchase program and positive market trends further support a positive outlook. Given the company's market cap of $1.16 billion, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
Dole plc (DOLE) Q3 2025 Earnings Call Transcript
Unknown11-10
The earnings call reveals mixed signals. Positive factors include a $100 million share buyback program, strong free cash flow, reduced net debt, and optimistic guidance. However, challenges like cost mismatches in Fresh Fruit, procurement issues, and lack of clarity on tariffs and 2026 guidance temper enthusiasm. The market cap suggests moderate volatility, aligning with a neutral sentiment, as positive and negative factors seem balanced.
Dole plc (DOLE) Q2 2025 Earnings Call Transcript
Unknown8-11
The earnings call presented mixed signals: strong adjusted EBITDA in some divisions and a dividend increase are positive, but tight supply conditions, increased costs, and a conservative EBITDA outlook due to trade volatility are concerns. The Q&A highlighted management's cautious tone on supply disruptions and tariffs, which could weigh on sentiment. The market cap indicates moderate stock sensitivity, suggesting a neutral reaction with potential fluctuations within a 2% range.
Dole plc (DOLE) Q1 2025 Earnings Call Transcript
Unknown5-12
The earnings call summary presents a mixed picture. Financial performance shows slight declines in revenue and EBITDA, impacted by foreign exchange and operational disruptions. However, the guidance remains optimistic, and the dividend increase is a positive sign. The Q&A reveals uncertainties in the fresh vegetables business and potential risks in capital expenditure. The market cap of $1.16 billion suggests moderate volatility, leading to a neutral stock price prediction as positive and negative factors balance each other out.
DOLE Report
Frequently Asked Questions
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