Good morning, CFOs. A close look at a big deal in the avocado industry; why stocks have more room to rally if the Strait of Hormuz reopens; and equity markets boost companies’ pension funding.

Mission Produce is gaining scale in the U.S. avocado market.

The publicly traded avocado producer last month closed on its acquisition of rival Calavo Growers. The deal, valued at $483 million, gives Mission Produce a share of just over 25% of avocados produced and imported in the U.S., up from about 17% before the transaction, according to the company.

The additional heft provides the company with more leverage when it comes to buying fruit or negotiating contracts in areas such as packaging and distribution, according to Chief Financial Officer Bryan Giles. “It's going to give us a little more leverage to provide a better quality, more affordable product,” Giles said. The acquisition also expands the company into new business lines, such as guacamole and other prepared foods.

Mission Produce’s earnings have taken a hit from recent price declines in the wholesale avocado market, stemming from a glut of supply. During the quarter ended April 30, net sales declined 24% during the quarter ended, to $290.9 million. The company reported a net loss of $7.2 million, compared with a $3.1 million profit a year earlier.

Asked about the recent uptick in inflation, Giles said his company’s largest cost of goods sold is the purchase of third-party avocados, the price of which is largely determined by supply. Still, Mission Produce is contending with higher costs in areas such as fuel and packaging. The Oxnard, Calif.-based company sources, produces, packs and distributes avocados for retail, wholesale and food services companies.

In recent weeks, wholesale prices and supply dynamics have begun to stabilize, according to Giles. “It's at a point where I think that we can provide a reasonable price to our customers who can then provide a reasonable price to the consumer, while still providing the economics that growers need,” he said.

📆 Earnings 

• La-Z-Boy
• John Wiley & Sons

📈 Economic Indicators

• The Census Bureau reports residential construction data for May.

The estimated funding level of pension plans sponsored by S&P 1500 companies increased by 2 percentage points in May to 110% as a result of an increase in equity markets partially offset by the decrease in discount rates, according to consulting firm Mercer LLC. As of the end of May, the plans' estimated aggregate surplus increased by $22 billion, to $146 billion, compared with a $124 billion surplus at the end of April, Mercer said.

"Equities continued their streak of strong performance from April into May, indicating that economic uncertainties around the ongoing geopolitical tensions in the Middle East may be waning," said Mercer partner Matt McDaniel.

—Jennifer Williams

Investors just shook loose one of the biggest drags on market sentiment since late February. 

Oil prices fell, bonds rallied and the Dow Jones Industrial Average closed at a record on Monday after President Trump announced a deal to end the war with Iran and reopen the Strait of Hormuz, the world’s most vital artery for energy shipments.

The latest Middle East developments added to the ledger of optimistic news and capped the market’s best three-session stretch since the May 2025 tariff de-escalation with China.

• How Quickly Can the Strait of Hormuz Get Back Up and Running?

📰 Other headlines

• Justice Department Decision to Allow Paramount Deal Surprised Staff Investigators
• The FTC Cracked Down on ‘Hidden’ Car Dealer Fees. They’re Still Happening Anyway.
• Labor Board Rejects Whole Foods Challenge to Philadelphia Union Election
• Truist Names New CEO as Regional Bank Pushes to Boost Performance
• Kohl’s Names Former Foot Locker Exec as Chief Operating Officer
• DeepSeek Becomes China’s Most Valuable AI Startup After $7.4 Billion Fundraise
• Robinhood Markets to Cut 10% of Workforce in Restructuring
• Hotel Owners Are Rebelling Against Marriott’s Loyalty Program
• Bank of Japan Lifts Rates to 31-Year High

• Mondelez International, the cookie and candy company, named Amit Banati as CFO, effective July 1. Banati was previously CFO of Kenvue before stepping down in May ahead of the company’s acquisition by Kimberly-Clark. He succeeds Luca Zaramella, who was appointed chief operating officer earlier this year and has held both roles since then.
   
• Lovesac, a Stamford, Conn.-based furniture company, named Andrew Farag as CFO, effective immediately. He succeeds Keith Siegner, who stepped down from the role, but will remain at Lovesac for a short period to support the transition. He was most recently managing director at Riveron and previously worked at Ankura Consulting.

—Elias Schisgall and Kelly Cloonan contributed to today’s Ledger.

The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy.

Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew.

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