Date: 2025-08-22 Page is: DBtxt003.php txt00027183
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EGGS
How Nvidia-Beating (!) Egg Producer Plans To Double Revenue By 2027 ... How Nvidia-Beating Egg Producer Plans To Double Revenue By 2027 ... 'Eggflation' and aviation flu made Vital Farms stock one of the best stocks of 2024.
EGGS
How Nvidia-Beating (!) Egg Producer Plans To Double Revenue By 2027 ... How Nvidia-Beating Egg Producer Plans To Double Revenue By 2027 ... 'Eggflation' and aviation flu made Vital Farms stock one of the best stocks of 2024.
Original article: https://www.investors.com/news/vital-farms-earnings-vitl-stock-egg-prices/
Peter Burgess COMMENTARY
For many years in the USA, eggs were a 'good buy' in the food supermarket but that changed during the COVID 19 pandemic as buying habits changed and there were issues in the egg supply chain.
Retail prices have come donw some ... but not to previous low levels, and producers are doing all they can to take tadvantage of the profit potential of the new economic equilibrium in the US egg market.
It is worth noting that there are several companies in the egg market and the related chicken market that play very competitive 'hard-ball' and good knowledge about their operations is shrouded in secrecy. PS ... I don't understand the reference to Nvidia in the 'heading'.
Peter Burgess
'Eggflation' and aviation flu made Vital Farms stock one of the best stocks of 2024.
Written by APARNA NARAYANAN
10:55 AM ET 08/08/2024
Vital Farms (VITL) hiked full-year earnings and revenue guidance early Thursday after beating estimates for the second quarter, as 'eggflation' continues to run high. Vital Farms stock plunged intraday after rallying in premarket action as the company warned on capex spending.
In the Vital Farms earnings release, management said it continues to target net revenue of $1 billion by 2027. That would be more than double the $471.9 million in revenue that the Austin, Texas-based egg producer generated in 2023.
'Beyond 2024, we plan to continue to invest in the long-term health of our business,' Vital Farms CEO Russell Diez-Canseco, said in the release. 'We have now passed a milestone of 350 family farms in our network, well on track to meet future demand.'
'Additionally, with our plans for an additional state-of-the-art egg washing and packing facility in Seymour, Indiana, we are in the process of adding another cornerstone piece to our supply chain's growing capacity to meet our $1 billion net revenue target by 2027,' he added.
However, management said Thursday that Vital Farms expects 'elevated' capital spending over the next two years tied to the construction of that new Seymour plant.
Vital Farms Earnings Surge, Sales Accelerate
Early Thursday, the company reported a 140% surge in earnings per share to 36 cents. But that marked a third consecutive quarter of decelerating earnings growth. Revenue jumped 38.5% to $147.39 million. Sales accelerated for a third straight quarter and showed a sharp increase from Q1's 24% gain.
The company cited 'volume gains of 35.8% and price/mix benefits' for revenue gains. It tied volume growth to 'accelerated demand for existing products, expanded item offerings, and store distribution gains across new and existing retail customers.'
Analysts, on average, had expected Vital Farms EPS of 20 cents on revenue of $138.4 million.
Gross Margin expanded 362 basis points to 39.1%, vs. 35.5% a year ago.
For the full year, the egg producer on Thursday guided to revenue of at least $590 million, up from a prior target of $575 million and a 25% increase from 2023. That was above analyst consensus views for $585.8 million.
Vital Farms guided full-year adjusted EBITDA of at least $75 million, a 55% increase vs. 2023, and up from a previous view for $70 million. It was also above analyst expectations for $73.7 million.
The company kept capital expenditure guidance for 2024 steady at $35 million-$45 million. But CFO Thilo Wrede said on an earnings call: 'With the construction of the Seymour facility, we anticipate elevated capex spending for the next few years with the bulk of the spending in 2025 and 2026.'
Vital Farms Stock
Shares tanked 9.1% to 31.57 in Thursday's stock market action. In premarket trade on Thursday, Vital Farms stock jumped almost 6%.
Vital Farms stock fell further below the 50-day moving average. However, it still holds a more than 75% gain from a cup-with-handle breakout at the end of February.
Cal-Maine (CALM) gained nearly 1% on Wednesday and was unchanged Thursday. On July 24, the nation's largest egg producer missed earnings and sales estimates.
Vital Farms, a producer of premium eggs, rocketed to record highs in 2024 along with the price of eggs. Avian flu and inflation have sent egg prices to record levels early in 2023.
Egg prices have since come well off those highs, but have climbed 8% so far this year, according to the U.S. Bureau of Labor Statistics.
The egg prices have helped boost VITL stock, which vaulted an impressive 121.3% year to date through Wednesday's close, topping Nvidia's (NVDA) 99.7% gain. After Thursday's plunge for Vital Farms stock, their year-to-date return are neck-to-neck, at around 104%.
Vital Farms earnings per share exploded 1,867% in 2023 as sales climbed 30%, FactSet shows.
On May 9, Vital Farms hiked 2024 guidance after smashing earnings estimates for the first quarter.
'Vital Farms presents a compelling and robust growth opportunity for investors through its participation in the fast-growing specialty egg category,' Stifel analyst Matthew Smith wrote in a May 13 note.
Basic food producers like Vital Farms and Cal-Maine may offer some shelter in tougher or recessionary markets.