Third quarter 2026
Filed Nov 3, 2026Third Quarter Net Revenue of $182.2 Million, Up 9.7% Sequentially from the Second Quarter; Updates Fiscal Year 2026 Net Revenue Outlook to around $730 Million and Adjusted EBITDA Outlook to a Loss of around $(15) Million
Third-quarter net revenue declined 8.4% year over year, gross margin fell to 23.1% from 37.7%, and the company reported a net loss and sharply lower Adjusted EBITDA while reducing its fiscal 2026 revenue and Adjusted EBITDA outlook.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenue, 13-Weeks Ended September 27, 2026GAAP | $182.2M | increase of 9.7% | decrease of 8.4% |
| Net revenue, 39-Weeks Ended September 27, 2026GAAP | $535.3M | – | – |
| Cost of goods sold, 13-Weeks Ended September 27, 2026GAAP | $140.0M | – | – |
| Cost of goods sold, 39-Weeks Ended September 27, 2026GAAP | $429.3M | – | – |
| Gross profit, 13-Weeks Ended September 27, 2026GAAP | $42.1M | – | – |
| Gross margin, 13-Weeks Ended September 27, 2026GAAP | 23.1% | – | – |
| Gross profit, 39-Weeks Ended September 27, 2026GAAP | $106.1M | – | – |
| Selling, general and administrative expenses, 13-Weeks Ended September 27, 2026GAAP | $38.14M | – | – |
| Shipping and distribution expenses, 13-Weeks Ended September 27, 2026GAAP | $11.69M | – | – |
| Total operating expenses, 13-Weeks Ended September 27, 2026GAAP | $49.82M | – | – |
| Total operating expenses, 39-Weeks Ended September 27, 2026GAAP | $156.2M | – | – |
| Loss from operations, 13-Weeks Ended September 27, 2026GAAP | $7.7M | – | – |
| Loss from operations, 39-Weeks Ended September 27, 2026GAAP | −$50.16M | – | – |
| Interest expense, 13-Weeks Ended September 27, 2026GAAP | −$2.93M | – | – |
| Interest income, 13-Weeks Ended September 27, 2026GAAP | $ 330 | – | – |
| Net loss, 13-Weeks Ended September 27, 2026GAAP | $6.5M | – | – |
| Net loss, 39-Weeks Ended September 27, 2026GAAP | −$39.05M | – | – |
| Net loss per diluted share, 13-Weeks Ended September 27, 2026GAAP | $0.15 | – | – |
| Net loss per diluted share, 39-Weeks Ended September 27, 2026GAAP | $ (0.91) | – | – |
| Adjusted EBITDA, 13-Weeks Ended September 27, 2026non-GAAP | $1.5M | improved $28.1 million sequentially from the second quarter of fiscal 2026 | – |
| Adjusted EBITDA margin, 13-Weeks Ended September 27, 2026non-GAAP | 0.8 % | – | – |
| Adjusted EBITDA, 39-Weeks Ended September 27, 2026non-GAAP | −$20.09M | – | – |
| Adjusted EBITDA margin, 39-Weeks Ended September 27, 2026non-GAAP | (3.8 )% | – | – |
| Adjusted net loss, 13-Weeks Ended September 27, 2026non-GAAP | −$6.46M | – | – |
| Adjusted net loss per diluted share, 13-Weeks Ended September 27, 2026non-GAAP | $ (0.15) | – | – |
| Adjusted net loss, 39-Weeks Ended September 27, 2026non-GAAP | −$27.97M | – | – |
| Adjusted net loss per diluted share, 39-Weeks Ended September 27, 2026non-GAAP | $ (0.65) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Retail channelNet revenue from sales through the retail channel was $175.1 million and $189.7 million for the 13-week periods ended September 27, 2026 and September 28, 2025, respectively. | $175.1M | – | – |
Fiscal year 2026 outlook
- Revenuearound $730 million
- NoteAdjusted EBITDA loss of around $(15) million
- NoteCapital expenditures in the range of $70 million to $75 million
Capital returns
- Repurchases of common stock (35,001 ) for the 39-week period ended September 27, 2026
What drove it
- The year-over-year net revenue decrease was primarily driven by a price/mix decline of $14.3 million and a volume-driven decline of $2.2 million, excluding breaker and wholesale channel sales.
- Sales to breaker and wholesale channels contributed $0.3 million to the net revenue decline, as a large volume increase was almost entirely offset by a price decline.
- Gross profit and margin decreases reflected higher input and production costs and unfavorable sales mix.
- An oversupply of egg inventory resulted in increased sales to breaker and wholesale channels at lower prices, reducing gross profit by $7.9 million.
- The operating-loss change was partially offset by tighter spending controls.
- The net-loss change was partially offset by lower SG&A expenses and an income tax benefit.
- Management cited distribution expansion and record dollar and volume share of the shell egg category.
Concerns
- Net revenue decreased 8.4% year over year.
- Gross margin declined to 23.1% from 37.7%.
- The company reported a net loss of $6.5 million, compared to net income of $16.4 million.
- Adjusted EBITDA declined to $1.5 million from $27.4 million in the prior-year quarter.
- Certain new distribution placements came on shelf later than planned, and management adopted a more conservative view of their near-term velocity contribution.
- The company updated fiscal 2026 net revenue outlook to around $730 million from $775 million to $800 million and updated its Adjusted EBITDA outlook to a loss of around $(15) million from a gain between $0 and $10 million.
- Vital Farms withdrew its previously announced fiscal 2030 financial targets.
What to watch
- Sequential improvement in Q4 compared with Q3, which management expects to be supported by lower anticipated breaker and supply-management costs, recent distribution gains and structural cost actions.
- Velocity across the expanded distribution base and the timing and contribution of new distribution placements.
- Progress reducing excess supply and the impact of breaker and wholesale channel sales on mix and gross profit.
- Execution against fiscal 2026 capital expenditures in the range of $70 million to $75 million.
- Progress expanding margins and improving profitability before the company revisits long-term targets.
Balance sheet and cash flow
- Cash and cash equivalents were $84.0 million as of September 27, 2026.
- Outstanding debt was $117.6 million.
- Cash and cash equivalents were $ 83,952 as of September 27, 2026, compared to $ 48,831 as of December 28, 2025.
- Investment securities, available-for-sale were — as of September 27, 2026, compared to $ 64,520 as of December 28, 2025.
- Total assets were $ 570,151 as of September 27, 2026, compared to $ 518,738 as of December 28, 2025.
- Total liabilities were $ 289,840 as of September 27, 2026, compared to $ 167,478 as of December 28, 2025.
- Total stockholders’ equity was $ 280,311 as of September 27, 2026, compared to $ 351,260 as of December 28, 2025.
- Net cash used in operating activities was $54.4 million for the 39-week period ended September 27, 2026, compared to net cash provided by operating activities of $27.9 million for the 39-week period ended September 28, 2025.
- Purchases of property, plant and equipment were $ (51,726) for the 39-week period ended September 27, 2026, compared to $ (44,024) for the 39-week period ended September 28, 2025.
- Capital expenditures totaled $51.7 million in the 39-week period ended September 27, 2026, compared to $44.0 million in the 39-week period ended September 28, 2025.
- Net cash provided by investing activities was $ 12,791 for the 39-week period ended September 27, 2026, compared to net cash used in investing activities of $ (84,336) for the 39-week period ended September 28, 2025.
- Net cash provided by financing activities was $ 76,770 for the 39-week period ended September 27, 2026, compared to net cash used in financing activities of $ (404) for the 39-week period ended September 28, 2025.
- Net increase in cash and cash equivalents was $ 35,121 for the 39-week period ended September 27, 2026, compared to net decrease in cash and cash equivalents of $ (56,805) for the 39-week period ended September 28, 2025.
Analysis
Vital Farms reported a weak year-over-year third quarter despite sequential improvement from the second quarter. Net revenue was $182.2 million, down 8.4% from $198.9 million, although it increased 9.7% sequentially. Management attributed the year-over-year revenue decline principally to a $14.3 million price/mix decline and a $2.2 million volume-driven decline, excluding breaker and wholesale channel sales. Retail-channel revenue was $175.1 million, compared with $189.7 million in the prior-year period.
Profitability deteriorated sharply. Gross profit was $42.1 million and gross margin was 23.1%, compared with gross profit of $75.0 million and a 37.7% margin a year earlier. Higher input and production costs and unfavorable sales mix drove the decline. Management specifically cited oversupply of egg inventory, which increased lower-priced breaker and wholesale sales and reduced gross profit by $7.9 million. The company recorded a $7.7 million operating loss and a $6.5 million net loss, versus operating income of $21.4 million and net income of $16.4 million in the prior-year quarter.
Non-GAAP results also reflected the margin pressure. Adjusted EBITDA was $1.5 million, down from $27.4 million, while Adjusted EBITDA margin was 0.8%, compared with 13.8%. The company said Adjusted EBITDA improved $28.1 million sequentially from the second quarter. For the 39-week period, operating cash flow was negative $54.4 million and capital expenditures totaled $51.7 million. At September 27, 2026, cash and cash equivalents were $84.0 million and outstanding debt was $117.6 million. Financing cash flow included proceeds from the Silver Point Term Loan of $120,617, a $30,000 draw on the JPMorgan Credit Facility, repayment of that $30,000 draw, and common-stock repurchases of $35,001.
The fiscal 2026 outlook was materially reduced. The company now expects net revenue of around $730 million, compared with prior outlook of $775 million to $800 million, and an Adjusted EBITDA loss of around $(15) million, compared with a prior expected gain between $0 and $10 million. Capital-expenditure guidance of $70 million to $75 million was reaffirmed. Management expects Q4 sequential improvement based on lower anticipated breaker and supply-management costs, recent distribution gains and structural cost actions, but its outlook assumes no seasonal uplift in demand or conventional egg pricing.
Management also withdrew its previously announced fiscal 2030 financial targets and said it expects to revisit long-term targets after making more progress expanding margins and improving profitability. The reported period therefore centers on whether the company can convert distribution gains and record shell-egg category share into higher velocity while reducing excess supply, improving mix and restoring margins.
Management, verbatim
Q3 represented a meaningful sequential improvement from Q2, consistent with our previously communicated expectation that Q2 would represent the trough in our financial performance. Net revenue and Adjusted EBITDA both improved sequentially, distribution expanded, we reached record dollar and volume share of the shell egg category, and we made progress reducing excess supply and lowering our cost structure.
Russell Diez-Canseco, Executive Chairperson, President and CEO
Our updated full-year outlook reflects the later-than-anticipated timing of certain new distribution placements, a more conservative assumption for their near-term velocity contribution, and no assumed seasonal uplift in demand or conventional egg pricing.
Thilo Wrede, Chief Financial Officer
Not in the filing
stated, not guessed- Previous-release outlook section was not provided, so no comparison of reported results with prior-period guidance is included.
- Free cash flow was not reported.
- Dividend amount and dividend policy were not reported.
- Fiscal 2026 gross-margin guidance was not reported.
- Fiscal 2026 operating-expense guidance was not reported.
- Fiscal 2026 tax-rate guidance was not reported.
- Third-quarter prior-quarter revenue, gross profit, gross margin, operating income, net income, EPS and operating-expense figures were not reported on their respective line items.
- Formal reportable-segment revenue was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.