Latest news with #RussellDiez-Canseco
Miami Herald
12-05-2025
- Business
- Miami Herald
Tariffs to hit a grocery item already battered by price hikes
I've felt the pain personally. As an organic girly through and through, I'm no stranger to sticker shock at the grocery store. If it's ethically sourced, sustainably farmed, or even remotely pasture-adjacent, I've probably paid double for it. Then there were weeks when even the non-organic versions were costing an arm and a leg. Related: When you'll see empty retail store shelves due to tariffs And just when it seemed like things might finally settle down, a new global pressure is about to shake up an already fragile market. Don't miss the move: Subscribe to TheStreet's free daily newsletter This time, it's tariffs - and they're coming for one of the most basic (and beloved) staples in the grocery store. Vital Farms ( (VITL) ), the leading U.S. brand of pasture-raised eggs, said it will raise prices on its shell-egg products starting this month. The announcement came during its recent earnings call, where CEO Russell Diez-Canseco cited rising costs tied to new tariffs announced by the Trump administration. The tariffs, which will impact key materials like steel, are expected to drive up commodity and operational expenses across the board. Related: Birkin bag maker faces major problem "While consumer demand for our products remains strong, we are mindful of potential headwinds from global trade tensions and broader economic uncertainties," the company stated in its quarterly filing. The brand has already notified major retail partners - including Target, Whole Foods (AMZN), Kroger, and Sprouts - of the price increase, which it described as a "modest, low-double-digit" jump. But with limited control over how retailers price their products, shoppers may ultimately feel an even bigger squeeze. This new increase comes after more than a year of volatility in the egg market, driven largely by supply shortages from the avian flu outbreak. Vital Farms saw its stock drop 8.9% following the news and is down more than 13% for the year. Rivals like Cal-Maine Foods (CALM) haven't fared much better, with a 10.9% dip in 2025 to date. The company reported Q1 revenue of $162.2 million - just under expectations - and net income of $16.9 million, a year-over-year drop of 11.2%. Despite the price hike, the brand is still holding to its full-year revenue guidance of at least $740 million. But the message behind the numbers is loud and clear: the egg aisle isn't catching a break anytime soon. If prices were painful before, what's coming next could really crack your grocery budget. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
08-05-2025
- Business
- Yahoo
Vital Farms's (NASDAQ:VITL) Q1 Earnings Results: Revenue In Line With Expectations
Egg and butter company Vital Farms (NASDAQ:VITL) met Wall Street's revenue expectations in Q1 CY2025, with sales up 9.6% year on year to $162.2 million. The company's outlook for the full year was close to analysts' estimates with revenue guided to $740 million at the midpoint. Its GAAP profit of $0.37 per share was 45.1% above analysts' consensus estimates. Is now the time to buy Vital Farms? Find out in our full research report. Revenue: $162.2 million vs analyst estimates of $162.6 million (9.6% year-on-year growth, in line) EPS (GAAP): $0.37 vs analyst estimates of $0.26 (45.1% beat) Adjusted EBITDA: $27.48 million vs analyst estimates of $21.33 million (16.9% margin, 28.8% beat) The company reconfirmed its revenue guidance for the full year of $740 million at the midpoint EBITDA guidance for the full year is $100 million at the midpoint, below analyst estimates of $100.9 million Operating Margin: 13.4%, down from 16.3% in the same quarter last year Free Cash Flow Margin: 1.3%, down from 15.3% in the same quarter last year Market Capitalization: $1.6 billion 'We delivered first quarter results that were in-line with our overall expectations and made good progress on our key 2025 strategic initiatives", said Russell Diez-Canseco, Vital Farms' President and Chief Executive Officer. 'We demonstrated solid execution, ongoing business momentum, and our continued focus on bringing ethical food to the table." With an emphasis on ethically produced products, Vital Farms (NASDAQ:VITL) specializes in pasture-raised eggs and butter. A company's long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. With $620.6 million in revenue over the past 12 months, Vital Farms is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers. On the bright side, it can grow faster because it has a longer list of untapped store chains to sell into. As you can see below, Vital Farms grew its sales at an incredible 30.5% compounded annual growth rate over the last three years as consumers bought more of its products. This quarter, Vital Farms grew its revenue by 9.6% year on year, and its $162.2 million of revenue was in line with Wall Street's estimates. Looking ahead, sell-side analysts expect revenue to grow 25% over the next 12 months, a deceleration versus the last three years. Still, this projection is noteworthy and indicates the market sees success for its products. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can't use accounting profits to pay the bills. Vital Farms has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company's free cash flow margin averaged 6.6% over the last two years, slightly better than the broader consumer staples sector. Taking a step back, we can see that Vital Farms's margin dropped by 9.1 percentage points over the last year. If its declines continue, it could signal increasing investment needs and capital intensity. Vital Farms's free cash flow clocked in at $2.15 million in Q1, equivalent to a 1.3% margin. The company's cash profitability regressed as it was 14 percentage points lower than in the same quarter last year, which isn't ideal considering its longer-term trend. We were impressed by how significantly Vital Farms blew past analysts' EPS and EBITDA expectations this quarter. On the other hand, its full-year EBITDA guidance slightly missed. Overall, we think this was still a solid quarter. The stock remained flat at $36.01 immediately following the results. Sure, Vital Farms had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
Associated Press
08-05-2025
- Business
- Associated Press
Vital Farms Reports First Quarter 2025 Financial Results
Record First Quarter Net Revenue of $162.2 Million, Up 9.6% Versus Prior Year Period Reaffirms Fiscal Year 2025 Outlook of $740 Million in Net Revenue and $100 Million in Adjusted EBITDA On Track to Reach $1 Billion Net Revenue Target in 2027 AUSTIN, Texas, May 08, 2025 (GLOBE NEWSWIRE) -- Vital Farms (Nasdaq: VITL), a Certified B Corporation that offers a range of ethically produced foods nationwide, today reported financial results for its first quarter ended March 30, 2025. Financial highlights for the first quarter ended March 30, 2025, compared to the first quarter ended March 31, 2024, include: 'We delivered first quarter results that were in-line with our overall expectations and made good progress on our key 2025 strategic initiatives, said Russell Diez-Canseco, Vital Farms' President and Chief Executive Officer. 'We demonstrated solid execution, ongoing business momentum, and our continued focus on bringing ethical food to the table. I'm pleased to reiterate our 2025 full-year guidance for net revenue and Adjusted EBITDA, and we remain on track to deliver our 2027 target of $1 billion in net revenue. Despite supply constraints, the first quarter represented the 20th consecutive quarter since our IPO in 2020 of year-over-year volume and net revenue growth, and after lapping two exceptional quarters in the previous years, our three-year net revenue CAGR is steady at 28%. I'm grateful to all our stakeholders—our farmers, suppliers, customers, crew members, stockholders, and communities—who make our progress possible every day. As demand for our products continues to increase, we continue to execute on our plan to accelerate our supply expansion. During the first quarter, we increased hens under contract as we added new family farms to our network, which I am thrilled to announce now exceeds 450 family farmers. Our internal capacity expansion plans also remain on track, with the construction of an additional egg washing and packing line at our Egg Central Station facility in Missouri slated for completion during the fourth quarter of 2025, as originally scheduled. Consumer awareness of Vital Farms continues to increase, a testament to our strong brand and powerful mission. We are seeing rising consumer awareness benefit not only our egg business but also our butter business, where we reported 41% net sales growth in the first quarter compared to the prior year period. Looking ahead to the remainder of the year, we continue to expect year-over-year net revenue growth to accelerate in the back half of the year as our supply chain investments enable higher sales volume. We believe we created a solid foundation in the first quarter and we are reiterating our fiscal year 2025 outlook and our objective to deliver $1 billion of net revenue by 2027.' 1Adjusted EBITDA is a non-GAAP financial measure defined in the section titled 'Non-GAAP Financial Measures' below and is reconciled to net income, its closest comparable GAAP measure, at the end of this release. For the 13 Weeks Ended March 30, 2025 Net revenue increased 9.6% to $162.2 million in the first quarter of 2025, compared to $147.9 million in the first quarter of 2024. Net revenue growth in the first quarter of 2025 was driven by price/mix benefits of $12.4 million and volume-related revenue growth of $1.9 million. Volume growth was driven by accelerated demand for existing products, new offerings and retail distribution gains with new and existing customers. Gross profit was $62.5 million, or 38.5% of net revenue, in the first quarter of 2025, up from $58.9 million, or 39.8% of net revenue, in the prior year quarter. Gross profit growth was driven by higher net revenue, scale and price/mix benefits, and favorable conventional commodity and diesel costs. Gross profit margin was down due to increased investment in crew members to keep pace with planned company growth. Income from operations was $21.8 million in the first quarter of 2025, compared to income from operations of $24.2 million in the first quarter of 2024. The decrease was driven by higher crew member investments, partially offset by higher sales and gross profit. Net income was $16.9 million in the first quarter of 2025, compared to net income of $19.0 million in the prior year quarter. The decline in net income was driven by increased higher crew member investments, partially offset by higher sales and gross profit. Net income per diluted share was $0.37 for the first quarter of 2025, compared to net income per diluted share of $0.43 in the prior year quarter. Adjusted EBITDA was $27.5 million, or 16.9% of net revenue, in the first quarter of 2025, compared to $29.1 million, or 19.7% of net revenue, in the first quarter of 2024. The decrease in Adjusted EBITDA was primarily driven by higher crew member investments, partially offset by higher sales and gross profit. Adjusted EBITDA excludes certain non-cash items. Adjusted EBITDA is a non-GAAP financial measure defined in the section titled 'Non-GAAP Financial Measures' below and is reconciled to net income, its closest comparable GAAP measure, at the end of this release. Balance Sheet and Cash Flow Highlights Cash, cash equivalents and marketable securities were $161.3 million as of March 30, 2025, and we had no outstanding debt. Net cash provided by operating activities was $5.3 million for the 13-week period ended March 30, 2025, compared to net cash provided by operating activities of $23.9 million for the 13-week period ended March 31, 2024. Capital expenditures totaled $3.1 million in the 13-week period ended March 30, 2025, compared to $1.3 million in the 13-week period ended March 31, 2024. Fiscal 2025 Outlook Thilo Wrede, Vital Farms' Chief Financial Officer, commented: 'We are reiterating our financial guidance for fiscal 2025 as we navigate the dynamic macroeconomic environment. While consumer demand for our products remains strong, we are mindful of potential headwinds from global trade tensions and broader economic uncertainties that could impact consumer spending patterns in coming quarters. Our outlook balances our strong market position and robust consumer demand against these external factors. While we face near-term supply constraints, we expect these to ease moving forward as additional family farms ramp up production. We remain confident in our view that the strategic investments we are making to build our brand and expand our supply chain will enable us to deliver our long-term vision and reach our $1 billion net revenue target by 2027.' For fiscal year 2025, we continue to expect: Vital Farms' guidance assumes that there are no significant disruptions to the supply chain or its customers or consumers, including any issues from adverse macroeconomic factors. Vital Farms cannot provide a reconciliation between its forecasted Adjusted EBITDA and net income and Adjusted EBITDA Margin and net income margin, their most directly comparable GAAP measures, without unreasonable effort due to the unavailability of reliable estimates for income taxes, among other items. These items are not within our control and may vary greatly between periods and could significantly impact future financial results. Conference Call and Webcast Details Vital Farms will host a conference call and webcast at 8:30 a.m. ET today to discuss the results. To participate on the live call, listeners in North America may dial +1-800-715-9871 and international listeners may dial +1-646-307-1963 with the Conference ID: 8674985. Alternatively, participants may access the live webcast on the Vital Farms Investor Relations website at under 'Events & Presentations.' The webcast will be archived for 30 days. In addition, Vital Farms will publish its May 2025 Corporate Presentation as supporting materials to the webcast on the Vital Farms Investor Relations website at under 'Events & Presentations.' About Vital Farms Vital Farms (Nasdaq: VITL) is a Certified B Corporation that offers a range of ethically produced foods nationwide. Started on a single farm in Austin, Texas, in 2007, Vital Farms is now a national consumer brand that works with more than 450 family farms and is the leading U.S. brand of pasture-raised eggs by retail dollar sales. Vital Farms' ethics are exemplified by its focus on the humane treatment of farm animals and sustainable farming practices. In addition, as a Delaware public benefit corporation, Vital Farms prioritizes the long-term benefits of each of its stakeholders, including farmers and suppliers, customers and consumers, communities and the environment, and crew members and stockholders. Vital Farms' products, including shell eggs, butter, hard-boiled eggs, and liquid whole eggs, are sold in approximately 26,000 stores nationwide. Vital Farms pasture-raised eggs can also be found on menus at hundreds of foodservice operators across the country. For more information, visit Forward-Looking Statements This press release and the earnings call referencing this press release contain 'forward-looking' statements, as that term is defined under the federal securities laws, including but not limited to statements regarding Vital Farms' market opportunity, anticipated growth, expectations regarding supply constraints, timing regarding Vital Farms' Digital Transformation project, specifications and timing regarding Vital Farms' planned egg washing and packing facility in Seymour, Indiana and new egg grading system at Egg Central Station in Springfield, Missouri, the effect of such projects on Vital Farms' future revenue, future growth of its family farm network, and future financial performance, including management's outlook for fiscal year 2025 and management's long-term outlook. These forward-looking statements are based on Vital Farms' current assumptions, expectations, and beliefs and are subject to substantial risks, uncertainties, assumptions, and changes in circumstances that may cause Vital Farms' actual results, performance, or achievements to differ materially from those expressed or implied in any forward-looking statement. The risks and uncertainties referred to above include, but are not limited to: Vital Farms' expectations regarding its revenue, expenses, and other operating results; Vital Farms' ability to attract new customers, to successfully retain existing customers, to attract and retain its suppliers, distributors, and co-manufacturers, and to maintain its relationships with members of its existing farm network and further expand its farm network and development of its accelerator farms; Vital Farms' ability to sustain or increase its profitability; Vital Farms' expectations regarding its future growth in the foodservice channel; Vital Farms' ability to procure sufficient high-quality eggs, cream for its butter, and other raw materials; real or perceived quality or food safety issues with Vital Farms' products or other issues that adversely affect Vital Farms' brand and reputation; changes in the tastes and preferences of consumers; the financial condition of, and Vital Farms' relationships with, its farmers, suppliers, co-manufacturers, distributors, retailers, and foodservice customers, as well as the health of the foodservice industry generally; the effects of outbreaks of agricultural diseases, including avian influenza and egg drop syndrome, the perception that outbreaks may occur or regulatory or market responses to such outbreaks generally; the ability of Vital Farms, its farmers, suppliers, and its co-manufacturers to comply with food safety, environmental or other laws or regulations; the impacts of international trade restrictions and tariff regimes; the effects of a public health pandemic or contagious disease, or fear of such outbreaks, on Vital Farms' supply chain, the demand for its products, and on overall economic conditions, consumer confidence and spending levels; specifications and timing regarding Vital Farms' planned egg washing and packing facility in Seymour, Indiana and the timing for installation of an additional egg washing and packing line at Vital Farms' Egg Central Station facility in Missouri, and the impacts of prior or future expansions of such facilities on Vital Farms' future revenue and farm network; future investments in its business, anticipated capital expenditures and estimates regarding capital requirements; anticipated changes in Vital Farms' product offerings and Vital Farms' ability to innovate to offer new products or enter into new product categories; the costs and success of marketing efforts; Vital Farms' ability to effectively manage its growth, to maintain effective internal controls over financial reporting and to remediate and prevent material weaknesses in its internal controls; Vital Farms' ability to compete effectively with existing competitors and new market entrants; the impact of adverse or volatile economic conditions, elevated interest rates, and inflation; the potential influence of Vital Farms' focus on a specific public benefit purpose and producing a positive effect for society on its financial performance; the sufficiency of Vital Farms' cash, cash equivalents, marketable securities and availability of credit under its credit facility to meet liquidity needs; seasonality; and the growth rates of the markets in which Vital Farms competes. These risks and uncertainties are more fully described in Vital Farms' filings with the Securities and Exchange Commission (SEC), including in the sections entitled 'Risk Factors' in its Annual Report on Form 10-K for the fiscal year ended December 29, 2024, which Vital Farms filed on February 27, 2025, its Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2025, which Vital Farms anticipates filing on May 8, 2025, and other filings and reports that Vital Farms may file from time to time with the SEC. Moreover, Vital Farms operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for management to predict all risks, nor can Vital Farms assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements Vital Farms may make. In light of these risks, uncertainties, and assumptions, Vital Farms cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Forward-looking statements represent management's beliefs and assumptions only as of the date of this press release. Vital Farms disclaims any obligation to update forward-looking statements except as required by law. Media: Rob Discher [email protected] Investors: John Mills ICR [email protected] Non-GAAP Financial Measures We report our financial results in accordance with GAAP. However, management believes that Adjusted EBITDA and Adjusted EBITDA Margin, non-GAAP financial measures, provide investors with additional useful information in evaluating our performance. Adjusted EBITDA and Adjusted EBITDA Margin are financial measures that are not required by or presented in accordance with GAAP. We believe that Adjusted EBITDA and Adjusted EBITDA Margin, when taken together with our financial results presented in accordance with GAAP, provide meaningful supplemental information regarding our operating performance and facilitate internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA and Adjusted EBITDA Margin are helpful to our investors as they are measures used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes. We calculate Adjusted EBITDA as net income, adjusted to exclude: (1) depreciation and amortization; (2) stock-based compensation expense; (3) (benefit) or provision for income taxes as applicable; (4) interest expense; and (5) interest income. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by Net Revenue. Adjusted EBITDA and Adjusted EBITDA Margin are presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Some of the limitations of Adjusted EBITDA and Adjusted EBITDA Margin include that (1) they do not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect these capital expenditures, (3) they do not consider the impact of stock-based compensation expense, (4) they do not reflect other non-operating expenses, including interest expense; and (5) they do not reflect tax payments that may represent a reduction in cash available to us. In addition, our use of Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similarly titled measures of other companies because they may not calculate Adjusted EBITDA and Adjusted EBITDA Margin in the same manner, limiting the usefulness as comparative measures. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA and Adjusted EBITDA Margin alongside other financial measures, including our net income and other results stated in accordance with GAAP. The following table presents a reconciliation of Adjusted EBITDA to net income and a reconciliation of Adjusted EBITDA Margin to net income margin, the most directly comparable financial measures stated in accordance with GAAP, for the 13- and 39-week periods presented.
Yahoo
14-04-2025
- Business
- Yahoo
Q4 Earnings Highlights: Vital Farms (NASDAQ:VITL) Vs The Rest Of The Perishable Food Stocks
Quarterly earnings results are a good time to check in on a company's progress, especially compared to its peers in the same sector. Today we are looking at Vital Farms (NASDAQ:VITL) and the best and worst performers in the perishable food industry. The perishable food industry is diverse, encompassing large-scale producers and distributors to specialty and artisanal brands. These companies sell produce, dairy products, meats, and baked goods and have become integral to serving modern American consumers who prioritize freshness, quality, and nutritional value. Investing in perishable food stocks presents both opportunities and challenges. While the perishable nature of products can introduce risks related to supply chain management and shelf life, it also creates a constant demand driven by the necessity for fresh food. Companies that can efficiently manage inventory, distribution, and quality control are well-positioned to thrive in this competitive market. Navigating the perishable food industry requires adherence to strict food safety standards, regulations, and labeling requirements. The 11 perishable food stocks we track reported a satisfactory Q4. As a group, revenues beat analysts' consensus estimates by 1.4%. While some perishable food stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.6% since the latest earnings results. With an emphasis on ethically produced products, Vital Farms (NASDAQ:VITL) specializes in pasture-raised eggs and butter. Vital Farms reported revenues of $166 million, up 22.2% year on year. This print exceeded analysts' expectations by 3.8%. Overall, it was a stunning quarter for the company with a solid beat of analysts' EPS estimates and an impressive beat of analysts' EBITDA estimates. '2024 was an outstanding year for Vital Farms. We exceeded $600 million in net revenue, keeping us well on track to deliver our $1 billion sales target by 2027.' said Russell Diez-Canseco, Vital Farms' President and CEO. Vital Farms pulled off the highest full-year guidance raise of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $34.02. We think Vital Farms is a good business, but is it a buy today? Read our full report here, it's free. Founded in 1983 in California, Mission Produce (NASDAQ:AVO) grows, packages, and distributes avocados. Mission Produce reported revenues of $334.2 million, up 29.2% year on year, outperforming analysts' expectations by 17%. The business had an incredible quarter with a solid beat of analysts' EPS estimates and an impressive beat of analysts' EBITDA estimates. Mission Produce pulled off the biggest analyst estimates beat among its peers. The stock is down 15.5% since reporting. It currently trades at $9.98. Is now the time to buy Mission Produce? Access our full analysis of the earnings results here, it's free. Translating to "of the mountain" in Spanish, Fresh Del Monte (NYSE:FDP) is a leader in providing high-quality, sustainably grown fresh fruits and vegetables. Fresh Del Monte Produce reported revenues of $1.01 billion, flat year on year, falling short of analysts' expectations by 2%. It was a disappointing quarter as it posted a significant miss of analysts' EBITDA and gross margin estimates. The stock is flat since the results and currently trades at $30.60. Read our full analysis of Fresh Del Monte Produce's results here. Known for brands such as Egg-Land's Best and Land O' Lakes, Cal-Maine (NASDAQ:CALM) produces, packages, and distributes eggs. Cal-Maine reported revenues of $1.42 billion, up 102% year on year. This number lagged analysts' expectations by 0.8%. Overall, it was a softer quarter as it also recorded a significant miss of analysts' EBITDA and gross margin estimates. Cal-Maine delivered the fastest revenue growth among its peers. The stock is up 10.5% since reporting and currently trades at $100. Read our full, actionable report on Cal-Maine here, it's free. With Wonder Bread as its premier brand, Flower Foods (NYSE:FLO) is a packaged foods company that focuses on bakery products such as breads, buns, and cakes. Flowers Foods reported revenues of $1.11 billion, down 1.6% year on year. This result missed analysts' expectations by 1.5%. More broadly, it was a satisfactory quarter as it also produced full-year revenue guidance exceeding analysts' expectations but a miss of analysts' organic revenue estimates. The stock is down 5.8% since reporting and currently trades at $18.21. Read our full, actionable report on Flowers Foods here, it's free. In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump's presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025. Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here. 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Yahoo
28-02-2025
- Business
- Yahoo
Vital Farms CEO says egg shortages will ease later this year, no plans to raise prices
Egg shortages have caused a frenzy among American shoppers this year as the bird flu epidemic takes a toll on US egg production. But premium egg producer Vital Farms (VITL) expects some improvement later this year. "Industry supply will remain under pressure to start the year due to the impact of HPAI [bird flu] on poultry flocks across the United States," Vital Farms CEO Russell Diez-Canseco said in an earnings release. "However, as the year progresses, we believe the supply chain investments we made in 2024 and into 2025 will begin bearing fruit." See for yourself — The Yodel is the go-to source for daily news, entertainment and feel-good stories. By signing up, you agree to our Terms and Privacy Policy. Vital Farms stock jumped 4% in midday trading Friday following its fourth quarter results. In the three months ending Dec. 29, the company reported revenue rose 22.2% to $166 million. For the full year, revenue tallied $606 million. Vital Farms also said it expects its full-year 2025 revenue to be "at least" $740 million. "Near-term demand trends are strong and the long-term runway is solid, given continued market share gains of pasture-raised eggs via favorable macro trends and initiatives, including higher household penetration, new distribution, greater shelf space, and new products," Sarang Vora, a research analyst at Telsey Advisory Group, wrote in a note to clients. As prices for regular eggs have risen, premium producers have benefited from a shrinking price difference for higher-end eggs. Nationally, a dozen large Grade A eggs cost a record-high $4.95 in January, compared to $2.52 a year ago. It marked a 53% increase in the cost of eggs year over year, according to data from the Bureau of Labor Statistics, as overall grocery inflation rose 1.9% compared to a year ago. Read more: From $5 eggs to insurance premiums, here's where prices are rising Although the US Department of Agriculture expects egg prices to increase 41% in 2025, Diez-Canseco told Yahoo Finance that Vital Farms has no plans to raise prices. "We're not playing a short-term game of ... gaming the pricing in the marketplace," Diez-Canseco said Friday (see video above). He added that egg prices are "outrageous" right now, and Vital Farms plans to stick to its model. "We're building a brand for the long haul, and that's resulted in very consistent growth with positive gross margins and profitability since the IPO," he said. "That's pretty rare for a small, fast-growing company like ours." Meanwhile, investors have also flocked to America's largest egg producer, Cal-Maine Foods (CALM), which supplies eggs to Walmart (WMT) and many private-label brands. Cal-Maine shares increased 55% in the past year, while Vital Farms stock is up roughly 80%. "You're seeing a well-run commodity business benefit from a rise in the commodity price," New Constructs founder and CEO David Trainer told Yahoo Finance over the phone earlier this year. "When prices are high, they can make lots of money." The egg inflation and shortages have been largely caused by the spread of highly pathogenic avian influenza (HPAI), commonly known as bird flu. On Wednesday, United States Agriculture Secretary Brooke Rollins introduced a five-part strategy to combat avian flu outbreaks in a Wall Street Journal op-ed. "It was wonderful to see the Trump administration's focus on this," Diez-Canseco said of Rollins's plan. He noted that federal investment may help "America's egg farmers repair maybe some of that aging infrastructure that's allowing the introduction of wild animals that may be infecting birds." In the meantime, national grocers such as Costco (COST) and Trader Joe's have placed limits on the amount of eggs consumers can purchase at a time. And some restaurants, including Waffle House and Denny's (DENN), have added a surcharge to egg menu items. "Due to the nationwide egg shortage and increased cost of eggs, some of our restaurant locations will need to temporarily add a surcharge to every meal that includes eggs," a Denny's spokesperson told Yahoo Finance. On March 12, the BLS will provide updated inflation data for the month of February, giving Americans a closer look at whether egg prices have continued to move higher. — Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@
