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Vital Farms Posts Q1 FY 2024 Financial Results


In a May 8th release, Vital Farms Inc. (VITL), a Certified B Corporation posted financial results for the 1st quarter of FY 2024. Results far exceeded consensus estimates for revenue ($134 million, up 10.3 percent) and earnings (EPS $0.20). This specialty egg producer competes directly with Eggland’s Best and other producers and distributors of USDA Certified Organic and pasture-raised products including Pete and Gerry’s, Hidden Valley and Egg Innovations. The Company experiences the same pressures of feed cost, contractor remuneration, labor and transport as competitors in a fluctuating market environment still restrained by consumer concern over inflation.


For Q1 FY 2024 ending March 31st 2024, net income was $19.0 million on revenue of $147.9 million with a diluted EPS of $0.46.  Comparable figures for Q1 2023 ending March 26th were net income of $7.1 million on revenue of $119.2 million with a diluted EPS of $0.18.


Revenue increased 24.1 percent over Q1 2023. Gross margin was 39.8 percent for the most recent quarter (35.8 percent Q1 FY 2023). Operating margin was 16.3 percent (9.1 percent in Q1 2023).  


In commenting on Q1, Russell Diez-Canseco CEO stated:- “2024 is off to a very strong start with record net revenue in the first quarter of $147.9 million, reflecting net revenue growth of 24.1%. Thanks to our stakeholders, including farmers and suppliers, customers and consumers, communities and the environment, crew members, and stockholders, we are able to succeed in our mission of bringing ethical food to the table. As a result of the momentum we have seen so far this year and our improved visibility into the rest of the year, we are raising our fiscal year 2024 outlook. These first quarter results demonstrate our ability to expand our commercial presence as well as the Vital Farms brand’s growing resonance with consumers. This leads to growing demand for our products, and I am thrilled to announce that we have signed an agreement to acquire land for a new, state-of-the-art egg washing and packing facility in southern Indiana. This strategic investment is part of our commitment to expansion and innovation and is an integral part of our journey to achieve at least $1 billion in annual net revenue by 2027,” 


The Company increased guidance for FY 2024 projecting revenue of $575 million, an adjusted EBITDA of $70 million and capital expenditure of $35 to $45 million.


On March 31st 2023, VITL posted assets of $300.2 million, of which $4.9 million comprised intangibles against long-term debt and lease obligations of $16.5 million. The Company had an intraday market capitalization of $1,500 million on May 14th. VITL trades with a forward P/E of 208 and has ranged over a 52-week period from $10.23 to $39.25 with a 50-day moving average of $25.36.  Twelve-month trailing operating margin was 16.3 percent and profit margin 7.5 percent.  Return on assets over the past twelve months was 11.1 percent with 19.6 percent on equity.


At close of trading on May 8th pre-release, VITL was priced at $29.91. Post-release on May 9th VITL closed at at $37.97.


Approximately 36 percent of VITL equity is held by insiders with 64 percent owned by institutions, up 4 percent in a year. As of April 30th 4.4 percent of the float was short.