Vital Farms Q1 2025 Earnings: Revenue Misses Estimates, EPS Beats Expectations

Vital Farms Inc reported Q1 2025 net revenue of $162.2 million, a 9.6% increase YoY, but slightly below analyst estimates. EPS of $0.37 beat estimates of $0.28. The company attributed the decline in gross margin to increased investments in crew members and reaffirmed its fiscal year 2025 outlook, projecting net revenue of at least $740 million and adjusted EBITDA of at least $100 million.

Vital Farms Inc (NASDAQ:VITL) reported its Q1 2025 financial results, showing a 9.6% year-over-year (YoY) increase in net revenue to $162.2 million, slightly below analyst estimates of $162.6 million. The company's earnings per share (EPS) of $0.37 beat analysts' estimates of $0.26, marking a 45.1% beat. However, the gross margin declined to 38.5% from 39.8% in the prior year, attributed to increased investments in crew members [1].

The company's adjusted EBITDA of $27.48 million also fell short of analyst estimates of $21.33 million by 16.9%, indicating margin compression. Despite these challenges, Vital Farms reaffirmed its full-year 2025 outlook, projecting net revenue of at least $740 million and adjusted EBITDA of at least $100 million [1].

Vital Farms' revenue growth was driven by both egg and butter product segments, with egg-related sales growing 9% YoY to $156.3 million and butter-related sales surging 41% to $5.9 million. However, the company noted that volume growth was below trend, contributing to the margin decline [2].

The company's brand awareness has grown significantly, from 17% in 2020 to 31% in Q1 2025, and its consumer base has doubled from 7.5 million households in Q1 2021 to 15.1 million in Q1 2025. Despite these positive trends, investors remain concerned about the company's slowing growth trajectory and profitability challenges, as evidenced by the stock's 2.7% decline in pre-market activity to $34.95 [2].

Vital Farms' ability to achieve its ambitious 2027 targets, aiming for $1 billion in net revenue and an adjusted EBITDA margin of approximately 35%, will depend on its success in expanding distribution, growing consumer awareness, and managing costs while maintaining its commitment to ethical farming practices and stakeholder value creation [2].

References:
[1] https://finance.yahoo.com/news/vital-farms-nasdaq-vitl-q1-123417965.html
[2] https://www.investing.com/news/company-news/vital-farms-q1-2025-slides-revenue-up-96-amid-margin-pressure-maintains-guidance-93CH-4032245