SunOpta’s third quarter results showed strong revenue growth, but the market responded negatively as operational challenges weighed on profitability. Management attributed the 17% volume growth to broad-based demand in plant-based beverages, fruit snacks, and foodservice channels, with CEO Brian Kocher noting, “Our categories are roaring. Our customers are voting with their business, and they are voting for us.” However, Kocher also acknowledged that the rapid pace of growth strained the company’s production network, leading to higher maintenance and overtime costs, and delays in margin improvement initiatives.

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While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From SunOpta’s Q3 Earnings Call

• James Salera (Stephens Inc.) asked about the sequencing of gross margin recovery and whether Q4 margin pressures would be temporary or persist into next year. CEO Brian Kocher explained the cost headwinds are “time-bound” and expects margin improvement to resume in the second half of 2026.
• James Salera (Stephens Inc.) followed up on why multiple customers accelerated their volume commitments. Kocher attributed this to SunOpta’s ability to quickly scale production and its value proposition, noting, “This volume is with marquee customers in great channels.”
• Andrew Strelzik (BMO Capital Markets) questioned why not all new demand would flow through to future top-line growth. Kocher clarified that capacity limitations will constrain near-term growth until new equipment and lines are installed.
• Jon Andersen (William Blair) raised concerns about the ability to price for overload volume and maintain margins. Kocher acknowledged pricing actions have been taken where possible but highlighted supply chain constraints and customer relationships as critical to long-term value.
• Daniel Biolsi (Hedgeye) asked about the duration and magnitude of Q4 headwinds. CFO Greg Gaba said impacts are not recurring quarterly and are expected to ease as operational fixes are implemented, with full recovery by mid-2026.

Catalysts in Upcoming Quarters

Looking ahead, our analysts will be watching (1) the pace and effectiveness of operational recovery measures, particularly at the Midlothian facility; (2) the on-time installation and ramp-up of the new aseptic processing line and wastewater management systems; and (3) continued volume growth in key categories such as plant-based beverages and fruit snacks. Successful execution in these areas will be crucial for SunOpta to deliver on its margin and growth targets.

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