Dole (DOLE)

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.

Company Overview

Known for its delicious pineapples and Hawaiian roots, Dole (NYSE:DOLE) is a global agricultural company specializing in fresh fruits and vegetables.

The perishable food industry is diverse, encompassing large-scale producers and distributors to specialty and artisanal brands. These companies sell produce, dairy products, meats, and baked goods and have become integral to serving modern American consumers who prioritize freshness, quality, and nutritional value. Investing in perishable food stocks presents both opportunities and challenges. While the perishable nature of products can introduce risks related to supply chain management and shelf life, it also creates a constant demand driven by the necessity for fresh food. Companies that can efficiently manage inventory, distribution, and quality control are well-positioned to thrive in this competitive market. Navigating the perishable food industry requires adherence to strict food safety standards, regulations, and labeling requirements.

Competitors in the fresh produce category include Calavo Growers (NASDAQ:CVGW), Fresh Del Monte (NYSE:FDP), and Mission Produce (NASDAQ:AVO) along with private companies Chiquita Brands International and Sunkist Growers.

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $8.97 billion in revenue over the past 12 months, Dole is one of the larger consumer staples companies and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s harder to find incremental growth when your existing brands have penetrated most of the market. To accelerate sales, Dole likely needs to optimize its pricing or lean into new products and international expansion.

As you can see below, Dole struggled to increase demand as its $8.97 billion of sales for the trailing 12 months was close to its revenue three years ago. This shows demand was soft, a rough starting point for our analysis.

This quarter, Dole reported year-on-year revenue growth of 10.5%, and its $2.28 billion of revenue exceeded Wall Street’s estimates by 5.7%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. This projection is underwhelming and indicates its newer products will not lead to better top-line performance yet.

Dole has bad unit economics for a consumer staples company, signaling it operates in a competitive market and lacks pricing power because its products can be substituted. As you can see below, it averaged a 8.2% gross margin over the last two years. That means Dole paid its suppliers a lot of money ($91.79 for every $100 in revenue) to run its business.

Dole’s gross profit margin came in at 6.8% this quarter, down 1.1 percentage points year on year. Zooming out, the company’s full-year margin has remained steady over the past 12 months, suggesting its input costs (such as raw materials and manufacturing expenses) have been stable and it isn’t under pressure to lower prices.

Dole’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 2.6% over the last two years. This profitability was paltry for a consumer staples business and caused by its suboptimal cost structureand low gross margin.

Analyzing the trend in its profitability, Dole’s operating margin might fluctuated slightly but has generally stayed the same over the last year, meaning it will take a fundamental shift in the business model to change.

This quarter, Dole generated an operating margin profit margin of 1.1%, down 1.3 percentage points year on year. Since Dole’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, and administrative overhead increased.

We track the change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

In Q3, Dole reported adjusted EPS of $0.16, down from $0.19 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Dole’s full-year EPS of $1.22 to grow 15.6%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Dole has shown weak cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 1.3%, subpar for a consumer staples business.

Taking a step back, we can see that Dole’s margin dropped by 1.2 percentage points over the last year. Almost any movement in the wrong direction is undesirable because of its already low cash conversion. If the trend continues, it could signal it’s in the middle of an investment cycle.

Dole’s free cash flow clocked in at $66.48 million in Q3, equivalent to a 2.9% margin. This cash profitability was in line with the comparable period last year and above its two-year average.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Dole historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 7.3%, somewhat low compared to the best consumer staples companies that consistently pump out 20%+.

Dole reported $321 million of cash and $956.7 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $360.1 million of EBITDA over the last 12 months, we view Dole’s 1.8× net-debt-to-EBITDA ratio as safe. We also see its $31.19 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We enjoyed seeing Dole beat analysts’ revenue expectations this quarter. We were also happy its EBITDA outperformed Wall Street’s estimates. On the other hand, its EBITDA guidance fell short of Wall Street’s estimates. Zooming out, we think this was a mixed quarter. The stock traded up 3.2% to $13.55 immediately after reporting.

Updated: December 3, 2025 at 10:04 PM EST

We think that the latest earnings result is only one piece of the bigger puzzle. If you’re deciding whether to own Dole, you should also grasp the company’s longer-term business quality and valuation.

We see the value of companies helping consumers, but in the case of Dole, we’re out. To kick things off, its revenue growth was weak over the last three years. And while its favorable brand awareness gives it meaningful influence over consumers’ dining decisions, the downside is its gross margins make it more challenging to reach positive operating profits compared to other consumer staples businesses. On top of that, its operating margins are low compared to other consumer staples companies.

Dole’s P/E ratio based on the next 12 months is 10.4x. This valuation is reasonable, but the company’s shaky fundamentals present too much downside risk. There are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $17.50 on the company (compared to the current share price of $14.73).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.