Vital Farms Cuts 2026 Revenue Outlook to About $730 Million

Vital Farms (Nasdaq: VITL) reduced its fiscal 2026 net revenue outlook to about $730 million after orders failed to show the usual pre-holiday increase and some new retail placements reached shelves later than planned. The revised forecast follows a third quarter in which profitability recovered sharply from the prior quarter but remained well below year-earlier levels as lower price and mix, elevated production costs and excess egg inventory weighed on results.

The company now assumes no seasonal volume lift in the fourth quarter, with retail velocity holding near the third-quarter rate. It also expects conventional egg prices to remain around third-quarter levels rather than firming into the holidays, leaving Vital Farms’ price gap with private-label products wider than it was during the recent industry shortage.

For the 13 weeks ended September 27, 2026, net revenue declined 8.4% year over year to $182.2 million. A $14.3 million price-and-mix decline accounted for most of the decrease, while lower volume excluding breaker and wholesale sales reduced revenue by $2.2 million. Breaker and wholesale channels contributed another $0.3 million decline as substantially higher volume was more than offset by lower pricing.

Gross profit fell 43.8% to $42.1 million, while gross margin contracted to 23.1% from 37.7%. Vital Farms attributed the decline to higher input and production costs and an unfavorable sales mix. Excess egg inventory led to more sales through lower-priced breaker and wholesale channels, reducing gross profit by $7.9 million.

The company reported a net loss of $6.5 million, or $0.15 per diluted share, compared with net income of $16.4 million, or $0.36 per diluted share, a year earlier. Adjusted EBITDA decreased to $1.5 million, or 0.8% of revenue, from $27.4 million, or 13.8% of revenue.

Sequential Recovery and Supply Actions

Despite the year-over-year declines, third-quarter results improved materially from the second quarter. Revenue rose 10% sequentially, adjusted EBITDA recovered from a $26.6 million loss, and gross margin increased by more than 16 percentage points.

Vital Farms said amendments to farmer contracts helped bring supply closer to retail demand. Egg volume sent to breaker and wholesale channels declined 59% from the second quarter, which the company identified as the largest contributor to the sequential margin recovery. It also completed a planned reduction of $6 million to $7 million from its annualized selling, general and administrative expense run rate.

Third-quarter SG&A expense decreased by $6.3 million from a year earlier and represented 20.9% of revenue, down from 22.3%. Shipping and distribution costs, however, rose to 6.4% of revenue from 4.6%, reflecting higher fuel costs and unfavorable linehaul rates.

Retail distribution continued to expand. Average shell-egg total points of distribution reached 162 during the quarter, up from 132 in the third quarter of 2025, and rose to 176 in the week ended October 25. Vital Farms recorded a 7.2% share of shell-egg retail sales by dollar value and a 2.3% volume share in the third quarter.

Fourth-Quarter Assumptions and 2026 Outlook

Management said retailers were purchasing for immediate requirements rather than building inventory ahead of Thanksgiving. Industry indicators also had not shown the typical pre-holiday pickup. In full-supply years, Vital Farms’ fourth-quarter volume previously increased by about 18% to 19% from the third quarter, but its current forecast assumes no comparable seasonal increase.

Some newly secured distribution also became available later than planned, reducing the expected fourth-quarter contribution from those placements and delaying the subsequent build in sales velocity.

Alongside net revenue of about $730 million, Vital Farms expects an adjusted EBITDA loss of approximately $15 million for fiscal 2026. Capital expenditures are projected at $70 million to $75 million, unchanged from the company’s previous guidance. Vital Crossroads, its planned second egg washing and processing facility, remains scheduled to pause once the building is enclosed.

Management pointed to the company’s larger scale relative to the last normally supplied third quarter in 2023 as support for its long-term opportunity. Compared with that period, third-quarter 2026 revenue was 65% higher, average shell-egg distribution was up 45%, and unit velocity per item per selling store increased 10%. Household penetration reached 9.6%, compared with 8.1% in 2023.

Near-term uncertainty remains tied to consumer response to the restored price gap between Vital Farms and private-label eggs. The company believes many light buyers gained during the egg shortage returned to private-label products as store-brand prices fell back to about $2 per dozen. Other disclosed risks include egg supply management, agricultural disease outbreaks, input and transportation costs, retailer demand, execution of capacity plans and the company’s ability to expand and retain its farm network.