Dole PLC's Q3 2025 Earnings Call: Contradictions Emerge on Tariff Impact, Fresh Fruit Cost Pressures, Capital Allocation Strategy, and Ecuador Export Prices

Date of Call: November 10, 2025

Financials Results

• Revenue: $2.3 billion, up 10.5% reported, up 8% like-for-like
• EPS: $0.16 adjusted diluted EPS, down from $0.19 prior year

Guidance:

• Full-year adjusted EBITDA expected at the upper end of the $380-$390 million target range.
• Routine capital expenditure reduced to approximately $85M for the year due to project timing; long-term routine CapEx target ~ $100M (in line with depreciation).
• Honduras farm rehabilitation estimated at ~$25M, to be covered by insurance proceeds.
• Board approved a $100M opportunistic share repurchase program.
• Q3 dividend of $8.50 declared (record Dec 9; payable Jan 6).
• Expect seasonal working-capital unwind to accelerate toward year-end.

Business Commentary:

• Strong Diversified Fresh Produce Segments:
• The company's two diversified fresh produce segments delivered excellent results, offsetting anticipated short-term headwinds in the fresh fruit segment.

• The performance was attributed to strong underlying growth in key markets like Spain and the Netherlands, as well as increased investments in distribution and logistics capabilities.

• Fresh Fruit Segment Challenges:

• The fresh fruit segment experienced a lower result compared to the previous year, driven by higher sourcing costs, notably for bananas, due to weather impacts and reduced yields in Latin America.

• The demand for bananas remained robust, indicating overall category health, despite cost pressures.

• Capital Allocation Strategy:

• The company approved a $100 million share repurchase program to opportunistically enhance shareholder value.

• This strategic move was facilitated by the previous sale of the non-core fresh vegetable business, providing clarity and financial flexibility.

• Nordic Region Investments:

• Investments in the Nordic region yielded significant improvements, with adjusted EBITDA growth of 34%, driven by higher earnings in Scandinavia and positive impacts from FX.

• These investments have been beneficial in terms of revenue growth and margin expansion, showcasing their long-term stickiness.

• Diversified Americas Performance:

• The Diversified Americas segment achieved a strong performance, with revenue growth of 8%, driven by North American market growth and positive final liquidations in the southern hemisphere export business.
• This performance was supported by the integration of Dole Diversified North America into OPI, streamlining operations and enhancing market positioning.

Sentiment Analysis:

Overall Tone: Positive

• Management repeatedly stated they were "very pleased to report another good result" and highlighted that adjusted EBITDA for the year is expected at the upper end of the $380–$390M range; they also announced a $100M share repurchase program and emphasized strong segment performance and strategic progress (e.g., new pineapple launch and strengthened diversified segments).

Q&A:

• Question from Christopher Barnes (Deutsche Bank): Could you elaborate on the key drivers of the implied Q4 outlook (the ~10% decline at the upper end of annual EBITDA guidance), particularly cost vs price mismatches in fresh fruit/bananas, and whether these cost pressures will continue into 2026? Also, any update on tariff exclusions for tropical produce into the U.S.?
  Response: Guidance reflects continued banana sourcing cost headwinds from Honduras and wider industry supply issues (Panama, Costa Rica, Ecuador spot prices); early to forecast 2026—market typically rebalances over time; no new update on tariff exclusions.

• Question from Gary Martin (Davy): Please explain the rationale for the $100M buyback and how it fits with your capital-allocation policy and leverage plans; any detail on where you’re investing (e.g., Nordics) and the nature of the reduction in routine CapEx to ~$85M—is that a new run-rate?
  Response: Buyback provides flexibility alongside a progressive dividend and continued targeted organic and bolt-on investments; many smaller productivity and distribution projects are yielding durable benefits; routine CapEx cut to ~$85M this year is timing-driven—long-term routine CapEx target remains ~ $100M (in line with depreciation).

• Question from Boren Sharma (Stephens): How are annual contracting negotiations progressing given current tight supply conditions, and can you expand on the drivers of strength in Diversified EMA and how sticky that upside is?
  Response: Negotiations are ongoing but customers are aware of supply constraints; management is optimistic about outcomes; Diversified EMA strength is driven by successful integration, distribution/logistics investments, market leadership across European markets and healthy consumer demand, producing durable gains.

• Question from Peter Galbo (Bank of America): Did you embed any tariff assumptions in this year’s guidance (and what would unwind mean flow-through next year)? Also, have you seen any material SNAP or government-shutdown impacts so far?
  Response: No specific tariff benefit or hit was built into guidance—any tariff change would largely be pass-through; no material SNAP/shutdown impact observed—only anecdotal minor channel shifts toward discount formats.

Contradiction Point 1

Tariff Impact on Guidance

It involves the impact of tariffs on financial guidance, which is crucial for investor expectations and strategic planning.

What tariff impacts were embedded in the guidance, and how might removing them affect future results? - Peter Galbo (Bank of America)

2025Q3: There were no specific positive or negative tariff impacts built into the guidance. Any changes in tariffs would be a pass-through, with no direct benefit or detriment. The focus remains on long-term industry alignment. - Rory Byrne(CEO)

Can you break down how much of the quarter’s pricing was tariff-driven and discuss the impact on sourcing costs? - Christopher Jayaseelan Barnes (Deutsche Bank AG)

2025Q2: We do not expect our business in 2024 to benefit or be penalized by tariffs. So our current guidance assumes that there will be no change in tariffs. - Rory Byrne(CEO)

Contradiction Point 2

Cost Pressures in Fresh Fruit Segment

It involves differing perspectives on the extent and duration of cost pressures within the fresh fruit segment, which could impact financial performance and strategic planning.

What are the key drivers behind the 10% reduction in the Q4 EBITDA guidance range upper end? Will cost pressures in the fresh fruit segment persist into 2026? - Christopher Barnes (Deutsche Bank)

2025Q3: Despite concerns, market adjustments are expected long-term. No precise predictions for 2026, but industry adjustments are anticipated. - Rory Byrne(CEO)

Can you clarify the EBITDA guidance? How much of the increase is due to improved quarterly performance, and are the higher expectations for the remainder of the year driven by organic growth or inorganic factors like current FX translation effects? - Christopher Barnes (Deutsche Bank)

2025Q1: Improved forecast due to better-than-expected Q1 results, especially in the face of Tropical Storm Sarah-related headwinds. Favorable Euro/Dollar exchange rate also contributes to better translation in reporting. Forecast includes impact of current tariffs. - Rory Byrne(CEO)

Contradiction Point 3

Capital Allocation Strategy and Share Buyback Program

It relates to the company's capital allocation strategy and the introduction of a share buyback program, which have significant implications for investors and shareholders.

How does the $100 million share buyback program align with your capital allocation strategy? - Gary Martin (Davy)

2025Q3: The strategic overhang of the discontinued fresh vegetable division was resolved, allowing for more definitive capital allocation. The buyback program is a tool in the toolkit for enhancing shareholder value, alongside capital development projects and potential acquisitions. It is flexible and can be used opportunistically. - Rory Byrne(CEO)

Can you outline the capital allocation policy, including internal and external opportunities? - Gary Martin (Davy)

2025Q1: Capital allocation options include acquisitions, internal developments, and strategic projects. Recent refinancing provides flexibility. Focus on completing the vegetable division process. Internal development projects include expansion in fresh food, Alpaca JV, and Northern Europe. - Rory Byrne(CEO)

Contradiction Point 4

Export Prices in Ecuador

It involves the changes in export prices in Ecuador and the impact on sourcing costs, which are critical for cost management and operational planning.

What are the key drivers of the 10% decline in the upper end of the Q4 annual EBITDA guidance? Will cost pressures in the fresh fruit segment persist into 2026? - Christopher Barnes (Deutsche Bank)

2025Q3: Export prices from Ecuador have risen significantly this year, impacting sourcing costs. - Rory Byrne(CEO)

How do you reconcile the updated EBITDA outlook with current forecasting challenges? - Christopher Jayaseelan Barnes (Deutsche Bank AG)

2025Q2: Export prices in Ecuador have risen significantly, impacting sourcing costs. - Rory Byrne(CEO)

Contradiction Point 5

Export Prices Impact on Sourcing Costs

It involves the impact of export price changes on sourcing costs, which is crucial for financial forecasting and operational planning.

What are the key drivers behind the 10% decline in the upper end of Q4 annual EBITDA guidance? Will cost pressures in the fresh fruit segment persist into 2026? - Christopher Barnes (Deutsche Bank)

2025Q3: Export prices from Ecuador have risen significantly this year, impacting sourcing costs. - Rory Byrne(CEO)

How do you reconcile the updated EBITDA outlook with current forecasting challenges? - Christopher Jayaseelan Barnes (Deutsche Bank AG)

2025Q2: Export prices in Ecuador have risen significantly, impacting sourcing costs. - Rory Byrne(CEO)