Fresh produce company Dole (NYSE: DOLE) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 10.5% year on year to $2.28 billion. Its non-GAAP profit of $0.16 per share was in line with analysts’ consensus estimates.

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StockStory’s Take

Dole’s third quarter was met with a positive market reaction, as the company exceeded Wall Street’s revenue expectations despite ongoing cost challenges in its Fresh Fruit segment. Management credited robust performance from its diversified produce operations in Europe and the Americas, as well as the successful launch of new products like the Colada Royale pineapple. CEO Rory Byrne highlighted the benefits of operational investments, especially in European logistics and distribution, noting, “Our diversified fresh produce segments have delivered excellent results, offsetting the anticipated short-term headwinds in our Fresh Foods segment.”

Looking ahead, Dole’s full-year guidance reflects continued caution around sourcing costs for bananas and other tropical fruits, as well as persistent macroeconomic and industry volatility. Management emphasized ongoing investments in supply chain resilience and product innovation, with the new share repurchase program offering additional strategic flexibility. Byrne pointed to the company’s ability to adapt, stating, “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.”

Key Insights from Management’s Remarks

Management attributed the quarter’s outperformance to strength in European and Americas diversified produce, operational investments, and the launch of new premium fruit varieties.

• Product innovation momentum: The introduction of the Colada Royale pineapple, a new variety developed over 15 years, generated excitement in the tropical category and commands a premium price, providing higher margins per box.
• EMEA operational investments: Upgrades in European logistics and distribution—particularly in the Nordics, Spain, and the Netherlands—drove revenue growth and margin expansion, with management noting continued integration across operations as a key driver.
• Americas segment streamlining: The integration of Dole Diversified North America into Oppy aimed to enhance efficiency in fruit distribution and expand reach in the North American market, supporting improved performance in the region.
• Sale of Fresh Vegetable division: The divestiture of the noncore Fresh Vegetable business in August gave Dole greater flexibility in capital allocation, enabling a renewed focus on key growth segments and supporting the introduction of a $100 million share repurchase program.
• Supply and cost headwinds: Short-term cost pressures in the Fresh Fruit segment—mainly from higher banana sourcing costs due to weather disruptions in Latin America—were partially offset by robust demand in North America and Europe, as well as insurance proceeds and investments in farm rehabilitation.

Drivers of Future Performance

Dole’s outlook is shaped by ongoing cost challenges in core produce lines, continued investment in supply chain resilience, and strategic capital allocation, including a new share repurchase program.

• Banana and tropical fruit costs: Management flagged continued elevated sourcing costs for bananas and related fruits due to weather disruptions in Honduras, Panama, and Costa Rica. While demand remains strong, supply constraints are expected to persist into the next quarter, impacting margins.
• Operational investments and integration: Ongoing upgrades to distribution, automation, and product handling in Europe and the Americas are expected to improve efficiency and support growth, with management emphasizing the importance of “sticky” long-term benefits from these investments.
• Capital allocation flexibility: The recent sale of the Fresh Vegetable business and the introduction of a $100 million share buyback program provide Dole with expanded options to invest in core segments, pursue bolt-on acquisitions, and maintain a progressive dividend policy, while managing leverage and routine capex within depreciation levels.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will watch (1) the pace of supply cost normalization in bananas and other key fruits, (2) progress on operational efficiency initiatives in Europe and North America, and (3) the impact of Dole’s capital allocation strategy, including the new share buyback program and potential bolt-on acquisitions. We will also monitor how ongoing product innovation and macroeconomic volatility influence performance.

Dole currently trades at $13.86, up from $13.13 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).

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