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Dole said first-quarter revenue rose about 12% year over year, but higher sourcing and operating costs meant adjusted EBITDA slipped to $100 million, slightly below last year. Adjusted diluted EPS also edged down to $0.33 from $0.35.
The fresh fruit segment was pressured by elevated fruit sourcing costs, weather-related supply disruptions and currency effects, which hurt profitability even as revenue increased. Management expects some relief later in the year as pricing and fuel surcharges catch up.
Despite the cost headwinds, Dole kept its full-year 2026 adjusted EBITDA target of at least $400 million. The company also highlighted stronger performance in its diversified segments and ongoing capital investments, including a planned automation/AI warehouse project and the pending sale of its Ecuador port operations.
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Dole (NYSE:DOLE) reported a solid start to fiscal 2026, with management citing strong consumer demand, favorable momentum in its diversified businesses and continued cost pressure in fresh fruit during the company’s first-quarter earnings webcast.
Chief Executive Officer Rory Byrne said revenue rose 12% year over year, supported by demand across key markets and “evolving dietary preferences influenced by GLP-1 adoption” as well as broader health and wellness trends. Adjusted EBITDA was $100 million, which Byrne said was in line with the company’s expectations.
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The company maintained its full-year outlook, continuing to target adjusted EBITDA of at least $400 million for 2026 despite higher costs tied indirectly to the conflict in the Middle East.
Chief Financial Officer Jacinta Devine said group revenue was 11.6% higher on a reported basis, reflecting positive demand and favorable foreign exchange movements. On a like-for-like basis, revenue increased 7%.
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However, cost of sales increased at a faster rate than revenue, driven mainly by higher fruit sourcing costs in the fresh fruit segment. Operating income declined by $6 million, while net income was $37.7 million, down $6.4 million from the prior year.
Adjusted EBITDA decreased by $4.5 million to $100 million, while adjusted net income fell by $1.9 million. Adjusted diluted earnings per share were $0.33, compared with $0.35 in the first quarter of 2025.
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Devine said interest expense declined by $4.6 million because of lower average borrowings, lower base rates and benefits from refinancing completed in May 2025. Dole ended the quarter with net debt of $657 million and net leverage of 1.7 times.
Dole’s fresh fruit division posted a 7% revenue increase, driven by higher worldwide pricing for bananas, pineapples and plantains, along with higher banana volumes in Europe. But adjusted EBITDA fell by $10.7 million due to higher fruit sourcing costs and the appreciation of the Costa Rican colon, which weighed on pineapple profitability.
Byrne said elevated fruit sourcing costs seen in 2025 continued into the first quarter. He also noted lower industry volumes and lingering impacts from prior supply disruptions, including weather-related issues.
Chief Operating Officer Johan Linden said supply remained tight after Tropical Storm Sara affected Honduras, weather issues hit Costa Rica and Panama production fell out of the market, affecting overall supply. Linden said Dole expects the picture to improve after the second quarter as pricing and fuel surcharge mechanisms catch up.
Byrne said Dole has rehabilitated farms in Honduras and invested in production and sourcing capacity in Guatemala for conventional and organic bananas and plantains. He said those investments are expected to provide benefits as the year progresses.
Dole’s Diversified EMEA segment had a stronger quarter, with adjusted EBITDA up 8%. Revenue grew 15% on a reported basis, helped by favorable foreign exchange and growth in France and Germany. Like-for-like revenue increased 4%.
Byrne said the Nordics were a strong contributor, particularly because of investments in Dole’s third-party logistics business, No Waste Logistics. Germany also contributed, driven by higher grape volumes. Those gains helped offset weaker profitability in the U.K., the Netherlands and South Africa.
Diversified Americas delivered another strong result, with adjusted EBITDA up 29%, according to Byrne. The segment benefited from a positive end to the Chilean cherry season, higher volumes in Southern Hemisphere exports and increased activity in North American imports and marketing operations. Those factors helped compensate for lower avocado pricing.
Byrne said the integration of Dole Diversified North America with Oppy has produced operational benefits. In response to an analyst question, he said the integration helped remove costs from the system and consolidate marketing efforts in North America, while noting that first-quarter results also benefited from seasonality in cherries.
Management said Dole has limited direct exposure to the Middle East, but the conflict is affecting the company indirectly through higher fuel, fertilizer, paper and shipping costs.
Byrne said Dole expects increased shipping and fuel costs in the second quarter, particularly in fresh fruit. He said North American fresh fruit customers have variable fuel surcharges in place, but those mechanisms operate with a lag.
“We do expect that Q2 is going to suffer quite a few of the costs, particularly in relation to fuel,” Byrne said during the question-and-answer session. He added that the surcharge formula should provide a benefit in the third quarter.
On demand, Byrne said Dole does some banana business in the Middle East and its South African operations sell into the region, including citrus. However, he said the company does not see a significant demand impact in its main core markets of Europe and North America.
Dole also updated investors on capital allocation. Byrne said regulatory approval has been received for the sale of the company’s port operations in Guayaquil, Ecuador, to Terminal Investment Limited, and Dole expects to complete the transaction during the current quarter. The company continues to expect after-tax net proceeds of approximately $75 million.
Byrne said Dole invested $18 million in routine capital additions during the quarter and continues to expect approximately $100 million of routine capital investment for the full year. He said the company is also evaluating development investments and bolt-on acquisitions across its operations.
Among the larger potential projects, Byrne said Dole is working toward finalizing a significant development investment of about $100 million involving automation, artificial intelligence and warehouse solutions, aimed at supporting long-term growth in its European distribution operations. In response to an analyst question, he said Dole is targeting returns of at least 12% to 15% on that type of investment.
The company is also exploring bolt-on acquisition opportunities in Ireland, Italy, Spain and Sweden. Byrne said Dole continues to assess development projects, acquisitions, dividends, share repurchases and debt repayment as part of a “dynamic” capital allocation process.
Despite cost headwinds and a more complex operating environment, Byrne said Dole remains confident in its diversified model and demand backdrop. “We are continuing to target full year adjusted EBITDA of at least $400 million for 2026,” he said.
Dole plc is a global producer, marketer and distributor of fresh fruits and vegetables. The company's product range includes bananas, pineapples, berries, grapes, salads and a variety of other fresh and packaged produce, sold under the Dole brand and through private-label arrangements. Dole's operations span the full fresh-produce value chain, from farming and sourcing to packing, ripening, cold‑chain logistics and wholesale and retail distribution, supporting both retail grocery and foodservice customers.
The company traces its commercial heritage to the early 20th century Hawaiian pineapple business founded by James Dole and has evolved through subsequent corporate restructurings and combinations.
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The article "Dole Q1 Earnings Call Highlights" was originally published by MarketBeat.
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