In an August 3^rd release, Vital Farms Inc. (VITL), a Certified B Corporation posted financial results for the 2^nd quarter of FY2023. This specialty egg producer competes directly with Eggland’s Best and other producers and distributors of USDA Certified Organic and pasture-raised products including Pete and Gerry’s, Hidden Valley and Egg Innovations. The Company experiences the same pressures of increased cost of feed, contractor remuneration, labor and transport as competitors in a market environment still restrained by COVID and inflation.

For the 2^nd Quarter of FY 2023 ending June 25^th 2021, net income was $6.7 million on revenue of $106.5 million with a diluted EPS of $0.15.  Comparable figures for the 2^nd quarter of fiscal 2022 ending June 26^th were net income of $0.2 million on revenue of $82.9 million with a diluted EPS below one cent.

Sales increased 28.6 percent over the 2^nd quarter of 2022. Gross margin was 35.5 percent for the most recent quarter (30.0 percent Q2 2022) Operating margin was 7.6 percent compared to 8.7 percent in Q2 2022.   

In commenting on results, Russell Diez-Canseco, Vital Farms’ President and CEO stated  “Our progress as a brand and as a business thus far in 2023 continues to reinforce my excitement in the long-term potential of our company. Our brand continues to gain new consumers and the business produced another quarter of impressive top-line growth, over 28 percent with double-digit Adjusted EBITDA Margin again this quarter.  Given the strong year-to-date results, we now feel confident increasing our full year Net Revenue and Adjusted EBITDA guidance”.

The Company increased guidance for FY 2023 with revenue of $465 million and an adjusted EBITDA of $35 million and capital expenditure of $16 to $21 million.

On June 25^th 2022, VITL posted assets of $236.3 million of which $5.1 million comprised intangibles against long-term debt and lease obligations of $8.6 million. The Company had an intraday market capitalization of $437.3 million on August 4^tth. VITL trades with a forward P/E of 33 and has ranged over a 52-week period from $10.23 to $18.18 with a 50-day moving average of $12.52.  Twelve-month trailing operating margin was 4.2 percent and profit margin 2.5 percent.  Return on assets over the past twelve months was 5.1 percent with 6.2 percent on equity. At close of trading on August 2^nd pre-release, VITL was priced at $10.34. At market open, post-release on August 3^rd VITL traded at at $13.39.

Approximately 35 percent of VITL equity is held by insiders with 63 percent held by institutions. As of July 14^th 6.7 percent of the float was short.