Vital Farms (VITL) Q1 2026 earnings summary

Executive summary

• Net revenue grew 15.4% year-over-year to $187.2 million in Q1 2026, driven by higher volumes and expanded distribution, but offset by lower pricing due to industry oversupply and increased sales to lower-margin channels.

• Gross margin declined to 28.3% from 38.5% (or 39%) due to higher input costs and unfavorable sales mix, including increased sales to lower-margin channels.

• Net loss was $1.5 million versus net income of $16.9 million in Q1 2025, reflecting increased costs and margin pressure.

• Adjusted EBITDA dropped to $5.0 million (2.7% margin), down from $27.5 million (16.9%), due to margin pressures and higher operating expenses.

• Strategic actions include winding down the butter business by year-end 2026, pausing new accelerator farm development, and focusing on core egg products to address oversupply.

Financial highlights

• Q1 2026 net revenue was $187.2 million, up 15.4% year-over-year, with volume growth offset by a $9.7 million price/mix decline.

• Gross profit was $53.0 million (28.3% margin), down from $62.5 million (38.5%) last year, mainly due to unfavorable mix and higher supply management costs.

• SG&A expenses rose to $44.2 million (23.6% of revenue) from $31.9 million (19.7%) due to increased marketing and headcount.

• Net loss per diluted share was $(0.03), compared to $0.37 last year.

• Cash, equivalents, and marketable securities totaled $51.4 million as of March 29, 2026, with no outstanding debt.

Outlook and guidance

• Fiscal 2026 net revenue guidance reduced to $775–$800 million; adjusted EBITDA guidance lowered to $0–$10 million, reflecting $32 million in supply management costs.

• Capital expenditures forecasted at $70–$75 million, down from previous $140–$150 million, due to pausing construction of the Seymour/Indiana facility and accelerator farms.

• Gross margin expected to return to 30% by late Q4 2026; adjusted EBITDA margin targeted to return to double digits in 2027.

• Volume growth expected to inflect positively in Q3 as pricing actions and distribution gains take effect.

• Guidance assumes no significant supply chain or macroeconomic disruptions.