Vital Farms(VITL) - 2025 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - From 2018 through 2024, the company achieved a compound annual growth rate (CAGR) of 34% in net revenue and 50% in Adjusted EBITDA [2] - For the year 2025 to date, revenues increased by 24% and EBITDA by 25% [2] Business Line Data and Key Metrics Changes - Vital Farms is primarily known for pasture-raised eggs and also offers pasture-raised butter, which is a smaller segment of the business [6] - The company has grown to become the second largest egg brand in the U.S., with a leading share in the fast-growing pasture-raised segment [2][6] Market Data and Key Metrics Changes - Vital Farms operates with over 575 small family farms across the "Pasture Belt," which supports year-round outdoor access for the birds [8] - The company has a strong presence in top retailers, being the number one or two egg brand in major stores like Whole Foods and Kroger [8] Company Strategy and Development Direction - The company focuses on improving animal welfare and transparency, which has contributed to its brand strength and gross margins [9] - Vital Farms plans to expand its family farm network and has successfully added about 150 farms in 2025 [30][31] - A new facility in Indiana is scheduled to begin operations in 2027, which will integrate cold storage to improve efficiency [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the brand's strength and the opportunity to demonstrate this in 2026 without the impact of avian influenza [12] - The company anticipates continued growth driven by brand awareness and household penetration, with a target of $2 billion in net revenue by 2030 [51][52] Other Important Information - The company successfully implemented a new ERP system, which initially slowed operations but is now functioning normally [38] - The company has a strong balance sheet, which enhances its attractiveness to farmers and lenders [22][23] Q&A Session Summary Question: Can you explain the impact of the ERP implementation on revenue guidance? - The ERP implementation caused temporary shipment disruptions, leading to a revised revenue guidance of $755-$765 million for the year [38] Question: How is consumer demand trending? - Consumption is trending positively, with record high volume levels for shell eggs leading into year-end, indicating no demand problem [41] Question: What are the growth drivers for 2026? - The company expects growth to be driven more by velocity rather than distribution, with plans to capture purchase opportunities lost during previous supply constraints [44]