Vital Farms Q4 Earnings Beat Estimates, Gross Margin Rises Y/Y

Vital Farms, Inc. VITL reported impressive fourth-quarter 2024 results, wherein the top and bottom lines increased year over year. Also, the company’s sales and earnings surpassed the Zacks Consensus Estimate.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Vital Farms' strategies focus on expanding supply-chain capabilities, increasing brand awareness and driving long-term growth. In 2024, the company added more than 125 family farms, increasing egg sourcing capacity by more than 40%, and announced plans for an egg washing and packing facility to support demand. Increased marketing efforts have strengthened brand awareness and consumer loyalty, with household penetration surpassing 14 million in 2024.Vital Farms, Inc. Price, Consensus and EPS Surprise  Vital Farms, Inc. price-consensus-eps-surprise-chart | Vital Farms, Inc. QuoteVITL’s Quarterly PerformanceVital Farms reported earnings of 23 cents per share, which surpassed the Zacks Consensus Estimate of 15 cents. Also, the bottom line improved from earnings of 17 cents in the year-ago quarter.Net sales of $166 million increased 22.2% from $135.8 million in the prior-year quarter and surpassed the Zacks Consensus Estimate of $160 million. This growth was primarily fueled by a $19 million increase in volume-related revenues, along with favorable price/mix dynamics. The volume increase was driven by higher sales velocities of existing products, the introduction of the latest offerings, and expanded retail distribution with both new and existing customers. Excluding the impacts of the extra week, net sales grew 30% year over year in the fourth quarter.Sneak Peek Into VITL’s Margins & CostsGross profit of $59.9 million increased 32.5% year over year. The gross margin of 36.1% expanded 280 basis points year over year. The increase in gross profit and margin was driven by higher net sales, economies of scale, price/mix benefits, operational efficiencies, and lower conventional commodity and diesel costs. These gains were partially offset by increased investments in crew members to support the company’s growth.Selling, general and administrative expenses of $37.4 million increased 29.8% from $28.8 million in the prior-year quarter.Adjusted EBITDA totaled $19.1 million in the fourth quarter of 2024, up 37.4% from $13.9 million in the fourth quarter of 2023. This rise was attributed to higher sales and gross profit, somewhat negated by investments in marketing and employee-related expenses. We note that the adjusted EBITDA margin expanded 130 basis points year over year to 11.5% in the quarter under review.Sneak Peek Into VITL’s Other FinancialsThe company ended the quarter with cash and cash equivalents of $150.6 million, and total stockholders’ equity of $269.3 million.Net cash provided by operating activities amounted to $64.8 million for the 52-week ended Dec. 29, 2024, with a capital expenditure of $28.6 million.VITL Stock Past Three-Month Performance Image Source: Zacks Investment Research VITL's 2025 GuidanceFor fiscal 2025, net sales are expected to reach at least $740 million, suggesting a growth rate of at least 22% from that reported in 2024. Adjusted EBITDA is projected to be at least $100 million, indicating 15% growth. The capital expenditure for the year is estimated between $50 million and $60 million, supporting investments in the new washing and packing line at Egg Central Station, a planned egg washing and packing facility, accelerator farms, and the Digital Transformation project expected to go live in the second half of 2025. The company will continue to evaluate capital allocation priorities and provide updates in future earnings reports.Long-term targets remain unchanged, with a goal of reaching $1 billion in net sales by 2027, a gross margin of at least 35% and an EBITDA margin of 12-14%. With a loyal consumer base, ongoing expansion of family farms, and a continued focus on increasing retail penetration and brand awareness, the company remains committed to delivering its eggs and butter to more households each year.This Zacks Rank #3 (Hold) company’s shares have lost 7.3% in the past three months compared with the industry’s decline of 6.1%.Key PicksHere, we have highlighted three better-ranked stocks, namely BRF Brasil Foods SA BRFS, Post Holdings POST and Lancaster Colony Corporation LANC.BRF is a Brazil-based food company focused on the production and sale of poultry, pork, beef cuts, milk, dairy products and processed food products. It presently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for BRF's current financial-year earnings and sales indicates growth of 19.4% and 0.3%, respectively, from the year-ago reported figures. BRFS delivered a trailing four-quarter average earnings surprise of 9.6%.Post Holdings is a consumer-packaged goods holding company involved in the production of center-of-the-store, refrigerated, foodservice, food ingredient and convenient nutrition product categories. It currently has a Zacks Rank #2.The Zacks Consensus Estimate for Post Holdings’ current fiscal-year earnings and sales indicates declines of 2.2% and 0.3%, respectively, from the year-ago reported figures. POST delivered a trailing four-quarter average earnings surprise of 22.3%.Lancaster Colony is a manufacturer and marketer of specialty food products for the retail and foodservice markets. The company carries a Zacks Rank of 2 at present. LANC delivered a trailing four-quarter earnings surprise of 1.7%, on average. The Zacks Consensus Estimate for Lancaster Colony’s current fiscal-year earnings and sales indicates growth of 6.1% and 3.1%, respectively, from the year-ago reported figures.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BRF S.A. (BRFS): Free Stock Analysis Report Post Holdings, Inc. (POST): Free Stock Analysis Report Lancaster Colony Corporation (LANC): Free Stock Analysis Report Vital Farms, Inc. (VITL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks