Vital Farms Q3 Earnings Beat Estimates on Higher Sales & Gross Margin
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Vital Farms, Inc. VITL reported third-quarter 2024 results, wherein the top and bottom lines increased year over year. The company’s earnings surpassed the Zacks Consensus Estimate, while sales were in line.
VITL achieved notable sales momentum and unwavering support of farmers, suppliers, customers, consumers, crew members and stockholders who share its commitment to delivering ethical food. Vital Farms’ long-term strategy is designed to boost brand awareness, enhance consumer loyalty and grow household penetration through a continued focus on brand marketing and expanding retail presence.
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Vital Farms, Inc. Price, Consensus and EPS Surprise
Vital Farms, Inc. price-consensus-eps-surprise-chart | Vital Farms, Inc. Quote
VITL’s Quarterly Performance
Vital Farms reported earnings of 16 cents per share, which surpassed the Zacks Consensus Estimate of 14 cents per share. Also, the bottom line improved from earnings of 10 cents per share in the year-ago quarter.
Net sales of $145.0 million increased 31.3% from $110.4 million in the prior-year quarter and were in line with the Zacks Consensus Estimate. The sales growth was fueled by a 21.7% increase in volume-related revenue and price/mix benefits. The volume growth was attributed to stronger sales velocities, new product offerings and increased retail distribution with existing and new customers.
Gross profit of $53.5 million increased 45.8% year over year. Gross margin of 36.9% expanded 368 basis points year over year, driven by stronger net sales, scale and price/mix benefits, operational efficiencies, and favorable commodity and diesel costs.
SG&A expenses of $36.1 million increased 43.9% from $25.1 million reported in the prior-year quarter.
Adjusted EBITDA totaled $15.2 million in the third quarter of 2024, up from $9.3 million in the third quarter of 2023, reflecting a rise of 64.5%. This rise was attributed to higher sales and gross profit, somewhat negated by new investments in marketing and employee-related expenses.
A Sneak Peek Into VITL’s Other Financials
The company ended the quarter with cash and cash equivalents of $149.5 million and total stockholders’ equity of $253.4 million.
Net cash provided by operating activities amounted to $50 million for the 39-week ended Sept. 29, 2024, with capital expenditures of $10.5 million.
VITL's 2024 Guidance
Vital Farms raised its guidance for 2024 on a positive commodity outlook and robust consumer demand, further supported by strategic reinvestment in marketing. For fiscal 2024, VITL anticipates revenues of at least $600 million, representing a 27% increase compared to fiscal year 2023. This forecast is higher than the previous expectation of $590 million.
Adjusted EBITDA is forecasted at least $80 million in fiscal 2024, representing a 65% increase compared to the fiscal year 2023. This forecast is higher than the previous expectation of $75 million.
Capital spending is expected to be $30-$40 million for 2024 versus $35-$45 million expected earlier.
This Zacks Rank #3 (Hold) company’s shares have declined 13.2% in the past six months compared with the industry’s decline of 5.6%.