Dole's Q3 2025 Earnings Call: Contradictions Emerge on Supply Chain, Tariffs, and Capital Allocation Strategy

Date of Call: November 10, 2025

Financials Results

• Revenue: $2.3 billion, up 10.5% reported and up 8% like-for-like YOY
• 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 million–$390 million target range.
• Routine capital expenditure reduced to approximately $85 million for the year (timing-related); long-term routine CapEx target ~ $100M (in line with depreciation).
• Honduras farm rehabilitation estimated at ~$25 million, to be covered by insurance proceeds.
• $100 million share repurchase program authorized to be used opportunistically.
• Q3 dividend of $0.085 declared, payable Jan 6.

Business Commentary:

* Fresh Fruit Segment Challenges and Opportunities: - Dole plc reported a decrease in adjusted EBITDA for the Fresh Fruit segment, primarily due to higher sourcing costs, particularly for bananas. Volumes were also lower for bananas compared to the prior year. - The decrease was driven by the impact of tropical storm Sara on Honduras sourcing in late 2024, reduced yields, and higher spot prices in Latin America, exacerbating procurement costs.

• Diversified EMEA and Americas Performance:
• Diversified EMEA segment experienced significant adjusted EBITDA growth, with a 34% increase on reported and 24% on a like-for-like basis.

• Growth was driven by strong underlying growth in Spain, the Netherlands, and increased investments in distribution and logistics capabilities in the Nordics.

• Capital Allocation Strategy and Share Repurchase Program:

• Dole plc announced a $100 million share repurchase program, providing flexibility to repurchase shares opportunistically.

• This decision aligns with the company's strategic growth plans and follows the sale of its noncore Fresh Vegetable division, enhancing shareholder value.

• Farm Rehabilitation and Operational Investments:

• The company is actively investing in rehabilitation and enhancements of its impacted farms in Honduras, with $25 million earmarked for this purpose, alongside routine capital expenditure.
• The investments are part of Dole's strategy to enhance supply resilience and adapt to changing market conditions, particularly in the wake of tropical storms.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management: "We are very pleased to report another good result... in line with market expectations." CEO: diversified segments delivered "excellent results." CFO: revenue $2.3bn, free cash flow $66.5m; CEO: full-year adjusted EBITDA expected at the upper end of $380m–$390m. Despite banana sourcing headwinds, commentary emphasized operational strength, buyback and capital-allocation clarity.

Q&A:

• Question from Christopher Barnes (Deutsche Bank AG, Research Division): 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 the implied 10% decline at the upper end of the annual EBITDA guidance? It just seems that cost versus pricing mismatches in Fresh Fruit and mainly bananas are the biggest contributor, especially given the volume momentum you've enjoyed year-to-date. So I'd just love more color around the fourth quarter? And then just thinking about 2026, like should we expect that these cost pressures continue into 2026? Or is the annual contracting progressing to your favor on pricing? Or is there some other offset, whether through your sourcing, easier compares from less tight industry supply? Like just love perspective on the fourth quarter and then into 2026.
  Response: Primary drivers for Q4 weakness are higher banana sourcing costs from Honduras and broader Latin American supply issues (Panama, Costa Rica); it's too early to forecast 2026 but management expects markets to gradually adjust and remains comfortable with current guidance.

• Question from Christopher Barnes (Deutsche Bank AG, Research Division): And then just a quick follow-up on the topic of tariffs into the U.S. I know it's 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 with that in mind, is there anything new to share from your and the broader produce industry's efforts to secure exclusions for tropical produce that you can't grow commercially in the U.S.?
  Response: No new developments; principle of exclusions exists but converting that into practical relief is taking time and there is no specific update.

• Question from Gary Martin (Davy, Research Division): It would be good to get your kind of two-cents on your thinking behind the buyback program and how that plays into the rest of your capital allocation policy? And maybe just as an add-on, how you kind of think about leverage going forward?
  Response: Sale of the Fresh Vegetable business clarified strategy and enabled a $100M buyback to complement a progressive dividend and targeted reinvestment/bolt-on activity; management will be patient on large M&A.

• Question from Gary Martin (Davy, Research Division): Are there any other areas that you'd flag similar to the Nordic investments that seem to be paying dividends, and how sticky is the upside from these investments?
  Response: Investments span distribution/logistics automation in Nordics, organic sourcing in Fresh Fruit, expanded handling (e.g., cherries) in Diversified Americas and ripening capabilities in Spain/France/Ireland; projects are intended to be durable and sticky.

• Question from Gary Martin (Davy, Research Division): On the reduction in routine CapEx to roughly $85m, can you dive into the nature of the reduction and whether ~$85m is a go-forward level?
  Response: The reduction is timing-related with projects pushed to 2026; long-term routine CapEx target remains ~ $100M (roughly in line with depreciation).

• Question from Pooran Sharma (Stephens Inc., Research Division): Can you give a sense of how your negotiations with customers have been going so far in annual contracting season? Any qualitative granularity on how negotiations are faring this season?
  Response: Too early in contracting to be definitive, but customers understand tight supply from Panama/Honduras/Costa Rica; negotiations are tough but management is optimistic they are conveying the supply story effectively.

• Question from Pooran Sharma (Stephens Inc., Research Division): Could you talk more about the strength you're seeing in diversified fresh produce, particularly EMEA—underlying drivers and performance so far?
  Response: Diversified EMEA strength reflects #1 positions across many European markets, benefits from integration (consolidated offerings, ripening/ripening facilities, logistics), and healthy consumer demand focused on affordability and health.

• Question from Peter Galbo (BofA Securities, Research Division): What was embedded in the $380M–$390M guidance this year regarding tariffs, and what would be the flow-through if tariffs were unwound next year?
  Response: No specific tariff upside or downside was built into this year's guidance; any tariff relief would largely be pass-through and not materially change our guidance assumptions.

• Question from Peter Galbo (BofA Securities, Research Division): Any implications from the recent government shutdown/SNAP interruption—did you see impacts in the first 10 days of the month on fresh fruit sales or channels?
  Response: No material trends observed; only anecdotal reports of slight sales decreases in government-employee areas and some shift to lower-cost channels, but overall representation across channels limits impact.

Contradiction Point 1

Supply Chain and Production Disruptions

It directly impacts expectations regarding the resolution of supply chain disruptions and potential revenue implications, which are critical for investor expectations.

What caused the 10% reduction at the top end of Q4 EBITDA guidance? Will cost pressures persist into 2026? - Christopher Barnes (Deutsche Bank AG, Research Division)

2025Q3: We believe the issues in Honduras will have a significant impact on availability and hence pricing in the fourth quarter. - Rory Byrne(CEO)

Regarding the timeline for resolving supply issues beyond Q3? - Peter Galbo (BofA Securities, Research Division)

2025Q2: We look at our business on a yearly basis. Supply disruptions likely extend to Q4 but could resolve by early next year. - Rory Byrne(CEO)

Contradiction Point 2

Tariff Impact and Strategic Positioning

It involves the company's stance on tariffs and their impact on pricing, which are important factors in assessing the company's strategic positioning and financial forecasts.

What is the rationale for the $100 million buyback program and its alignment with capital allocation strategy? Are specific regions, such as the Nordic region, showing strong investment returns? - Gary Martin (Davy, Research Division)

2025Q3: We believe our industry showcases trade's benefits. We've heard statements about excluding products like tropical fruits from tariffs, which will likely be part of trade deals. - Rory Byrne(CEO)

Are there any discussions on tariff exclusions for non-domestically produced goods? - Peter Galbo (BofA Securities, Research Division)

2025Q2: The change to the Blackwell GPU mask is complete without functional changes. Production is expected in Q4. - Rory Byrne(CEO)

Contradiction Point 3

Supply Chain Constraints and Tariff Impact

It involves differing perspectives on the impact of supply chain constraints and tariffs on the company's financial performance, which are crucial for investor understanding and forecasting.

What tariff impact is included in this year's guidance, and how could changes affect next year's outlook? - Peter Galbo(BofA Securities)

2025Q3: No specific positive or negative tariff impact was built into this year's guidance. - Rory Byrne(CEO)

Does the raised full-year adjusted EBITDA guidance of at least $380 million, which reflects Q1 performance and stronger Euro translation benefits, account for current tariffs' impact on the business? - Christopher Barnes(Deutsche Bank)

2025Q1: The guidance for full-year adjusted EBITDA has been raised to at least $380 million, reflecting better performance in Q1 and expected translation benefits from a stronger Euro. We've also increased the dividend by 6.25% to $0.085 per share. The flipside of this is that the guidance now reflects the current tariffs and their impact on our business. - Rory Byrne(CEO)

Contradiction Point 4

Capital Allocation Policy and Strategic Exit

It highlights changes in the company's strategic approach to capital allocation and strategic exits, which are critical for investor understanding of the company's future direction and financial health.

What is the rationale for the $100 million aggregate buyback program and how does it align with your capital allocation strategy? Which regions are generating strong investment returns (e.g., Nordic region)? - Gary Martin (Davy, Research Division)

2025Q3: The $100 million buyback program is a tool added to the capital allocation strategy, allowing for opportunistic acquisitions or small bolt-on investments. It's a flexible approach to enhance shareholder value. - Rory Byrne(CEO)

How do you envision your capital allocation policy moving forward, including both internal and external opportunities, following the post-quarter refinancing? - Gary Martin (Davy)

2025Q1: We keep all capital allocation alternatives on the table. The strategic outcome of the fresh vegetable division will impact future capital availability. - Rory Byrne(CEO)