Vital Farms Earnings: Record Q1 Revenue Amid Supply Constraints and Expansion Plans
- Hardik Shah
- May 8
- 3 min read
TL;DR
Record Q1 Revenue: Net revenue hit $162.2M (+9.6% YoY), marking the 20th straight quarter of growth.
Tariffs Prompt Price Hike: Modest low double-digit price increase implemented to offset tariffs and supply chain pressures.
2025 Guidance Reaffirmed: On track for $740M+ revenue and $100M+ Adjusted EBITDA, targeting $1B revenue milestone by 2027.
Business Overview
Vital Farms (NASDAQ: VITL) is a Certified B Corporation specializing in ethically produced food products, notably pasture-raised eggs and butter. The company works with over 450 family farms and sells through ~26,000 stores nationwide, reinforcing its mission-driven focus on humane treatment, sustainable practices, and delivering clean-label products to conscious consumers.
Vital Farms Earnings - Q1'25 Highlights (YoY Comparison)
Net Revenue: $162.2 million (+9.6%)
Gross Margin: 38.5%, down from 39.8% (crew investments and less efficient egg supply)
Net Income: $16.9 million vs. $19 million (impacted by higher labor and supply costs)
Adjusted EBITDA: $27.5 million vs. $29.1 million (EBITDA margin of 16.9%)
Cash and Marketable Securities: $161.3 million; No debt
"We demonstrated solid execution, ongoing business momentum, & our continued focus on bringing ethical food to the table." - Russell Diez-Canseco, CEO
Forward Guidance
Vital Farms reaffirmed its fiscal year 2025 outlook, despite macroeconomic uncertainties:
Net Revenue: ≥ $740 million (+22% YoY)
Adjusted EBITDA: ≥ $100 million (+15% YoY)
CapEx: $50–60 million to support new egg processing capacity, digital transformation, and accelerator farms
Price Increase Impact:A low double-digit price increase for shell eggs is now in effect (was not contemplated in the original guidance). This offers additional cushion against tariffs and rising input costs without needing to raise guidance yet.
"We remain confident that our investments and strong brand will enable us to deliver our long-term vision." — Thilo Wrede, CFO
Operational Performance
20th Consecutive Quarter of Volume and Revenue Growth
Family Farm Expansion: Added ~25 farms in Q1, pushing network to over 450 farms, targeting $1B revenue capacity.
Egg Central Station Expansion: New grading line (Q4 2025 completion) will lift ECS capacity by 30%.
Butter Business: 41% revenue growth driven by rising brand awareness and improved supply chain from Irish imports.
"Our consumers continue to go predictably from awareness to trial to repeat to heavy user—even in a challenged economy." — Russell Diez-Canseco, CEO
Market Insights
Resilient Consumer Base: Higher-income and mission-aligned consumers show limited trade-down risk despite economic pressures.
Tariffs Impacting Costs: Imported butter, packaging, and farm equipment affected; pricing power and loyal customers offer mitigation.
Retail Distribution: No significant new doors; change in store count from 24K to 26K due to switch in data providers, not expansion.
Strategic Initiatives
Supply Chain: On track with Seymour, Indiana facility and Missouri ECS upgrade to meet growing demand.
Accelerator Farms: Initial sites progressing to support farmer onboarding and innovation.
Digital Transformation: ERP system rollout delayed slightly to early fall 2025 to ensure smooth implementation.
Capital Allocation
No Dividend or Buyback Activity
CapEx: $50–$60M for infrastructure, supply chain, and technology. All funded from existing cash and cash flow.
No Debt: Healthy balance sheet with $161M cash provides flexibility amid higher input costs.
The Bottom Line
Vital Farms delivered a strong Q1 2025 despite supply and tariff headwinds. While gross margin compressed modestly due to crew investments and inefficiencies tied to egg supply, demand remains robust. Management reiterated FY2025 guidance and signaled confidence in accelerating growth through the year as new farms and capacity expansions come online. Their loyal consumer base, premium brand positioning, and pricing power leave Vital Farms well-positioned to achieve its $1 billion revenue target by 2027.
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