Dole's Q2 Earnings Miss Estimates on Higher Fresh Fruit Costs

Dole plc DOLE reported second-quarter 2026 adjusted earnings per share of 46 cents, down 16.4% from 55 cents in the year-ago quarter and below the Zacks Consensus Estimate of 50 cents. Revenues increased 2.9% year over year to $2.5 billion but missed the consensus estimate of $2.52 billion.

The company’s diversified fresh produce portfolio helped offset pressure in Fresh Fruit, where higher sourcing, fuel and shipping costs weighed on profitability. Diversified Fresh Produce - Americas & ROW delivered strong growth, with revenues rising 13.9% to $440.1 million and adjusted EBITDA increasing 33.8% to $20.6 million.

Dole’s shares have lost roughly 6% during yesterday's trading session, due to soft quarterly results. This Zacks Rank #3 (Hold) company’s shares have fallen 9.4% in the past three months, wider than the industry’s 6.4% decline.

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DOLE Revenue Growth Faces Cost Pressure

Dole’s second-quarter revenue growth reflected positive operational performance and favorable foreign currency translation. On a like-for-like basis, revenues increased 1.7%, or $40.7 million, as the company continued to see resilient consumer demand for fresh produce.

Gross profit declined 10.5% year over year to $195.3 million as cost of sales increased at a faster rate than revenues. Operating income decreased 54% to $47.5 million from $103.2 million, pressured by lower gross profit, higher selling, marketing, general and administrative expenses, a non-recurring legal settlement charge and lower gains from asset sales compared with the prior-year period.

Dole Segment Performance Remains Mixed

Fresh Fruit revenues were $972.8 million, broadly unchanged from the prior year. Higher banana volumes in Europe and stronger underlying banana pricing in North America were offset by lower banana volumes in North America and weaker pineapple volumes due to adverse weather conditions.

Fresh Fruit adjusted EBITDA declined 30.9% to $50.3 million, primarily due to higher fruit sourcing costs, elevated shipping costs, increased pineapple growing costs and the continued appreciation of the Costa Rican Colon against the U.S. dollar.

DOLE Diversified Operations Provide Support

Diversified Fresh Produce - EMEA generated revenues of $1.1 billion, up 1% year over year, driven by favorable foreign currency movements and underlying growth in Scandinavia. This was partially offset by lower revenues in Spain. Adjusted EBITDA decreased 6.2% to $45.9 million as weaker results in South Africa, the Netherlands and Spain outweighed strength in Scandinavia.

Diversified Fresh Produce - Americas & ROW remained a key contributor to results. Revenues increased 13.9% year over year, supported by higher volumes in North America, particularly kiwi, avocados and cherries, along with positive season-end pricing adjustments in the Southern Hemisphere export business. Adjusted EBITDA increased 33.8% year over year to $20.6 million.

Dole Strengthens Balance-Sheet Position

Dole continued to advance its capital allocation plans during the quarter. The company completed the Ecuador port sale after quarter-end, generating expected net proceeds of about $95 million. The transaction is expected to strengthen financial flexibility.

Net debt was $746.1 million at the end of the quarter, while net leverage stood at 2.0x. Capital expenditures totaled approximately $42.5 million during the six months of 2026, with investments focused on future growth, capacity expansion and operating efficiency. For 2026, Dole continues to expect routine capital expenditures of approximately $100 million.

The company also repurchased 719,290 shares during the quarter for $10 million at an average price of $13.88 per share. As of June 30, 2026, $85.4 million was available for repurchase under its repurchase program.

On Aug. 7, 2026, the company’s board declared a cash dividend for the second quarter of 2026 of $0.085 per share, payable Oct 7, 2026, to shareholders of record as of Sept. 16, 2026.

DOLE Outlook Remains Focused on Growth

Dole projected its 2026 adjusted EBITDA of approximately $400 million. Management expects the operating environment to remain complex due to elevated fuel and shipping costs, and ongoing geopolitical uncertainty.

The company expects benefits from fuel surcharge recoveries, cost-saving initiatives in Fresh Fruit, dynamic pricing across diversified businesses and returns from recent investments. Management also highlighted plans to invest in automation, Artificial Intelligence and warehouse solutions in Scandinavia following the acquisition of Greenfood’s Fresh Produce division.

Stocks to Consider in the Consumer Staples Space

Darling Ingredients Inc. DAR, which is a global developer and producer of sustainable natural ingredients, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

The Zacks Consensus Estimate for Darling Ingredients' current financial-year sales indicates growth of 12.4% from the prior-year level. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.

United Natural Foods UNFI, which is the leading distributor of natural, organic and specialty food and non-food products, currently carries a Zacks Rank #2 (Buy). 

The Zacks Consensus Estimate for United Natural Foods’ current financial-year sales indicates a drop of 2.1% from the prior-year level. UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.

Medifast, Inc. MED, which is a leading manufacturer and distributor of clinically-proven healthy living products and programs, currently carries a Zacks Rank of 2. MED missed the average earnings surprise by a sharp margin in the trailing four quarters. 

The Zacks Consensus Estimate for Medifast’s current financial-year sales indicates a decline of 25.9% from the year-ago number.

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This article originally published on Zacks Investment Research (zacks.com).

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