In an August 8^th release, Vital Farms Inc. (VITL), a Certified B Corporation posted financial results for the 2^nd quarter of FY 2024. Results far exceeded consensus estimates for revenue, 2.5 percent above Zack’s estimate and 71 percent above on earnings. This specialty egg producer competes directly with cooperative, Eggland’s Best and other producers and distributors of USDA Certified Organic and pasture-raised products including the Happy Egg, Pete and Gerry’s, Hidden Valley and Egg Innovations. The Company experiences the same pressures of feed cost, contractor remuneration, labor and transport as competitors in a fluctuating market environment less restrained by consumer concern over inflation.

For Q2 FY 2024 ending June 30^th 2024, net income was $16.3 million on revenue of $147.4 million with a diluted EPS of $0.36.  Comparable figures for Q2 2023 ending June 5^th were net income of $6.7 million on revenue of $106.5 million with a diluted EPS of $0.15.

Revenue increased 38.5 percent over Q2 2023. Gross margin was 38.5 percent for the most recent quarter (35.5 percent Q2 FY 2023). Operating margin was 11.6 percent (7.6 percent in Q2 2023)

In commenting on Q2 results Russell Diez-Canseco, president and CEO stated “Vital Farms got off to a great start in the first quarter of the year and we followed with another strong performance in the second quarter. I would like to thank all of our stakeholders who helped drive our mission of delivering ethical food to the table. This includes our farmers, suppliers, customers, consumers, crew-members, and stockholders.

He added “Boosted by a strong first-half performance and our positive outlook for the balance of the year, we are raising our fiscal year 2024 expectations. Beyond 2024, we plan to continue to invest in the long-term health of our business. We have now passed a milestone of 350 family farms in our network, well on track to meet future demand. Additionally, with our plans for an additional state-of-the-art egg washing and packing facility in Seymour, Indiana, we are in the process of adding another cornerstone piece to our supply chain’s growing capacity to meet our $1 billion net revenue target by 2027,”

The Company increased guidance for FY 2024 above the Q1 2024 report projecting revenue of $590 million, (up 2.6 percent) an adjusted EBITDA of $75 million (up 7.1 percent) with unchanged capital expenditure of $35 to $45 million.

On June 30^th 2023, VITL posted assets of $320.5 million, of which $5.5 million comprised intangibles against long-term debt and lease obligations of $15.1 million. The Company had an intraday market capitalization of $1,360 million on August 9^th compared to $481 million on September 30^th 2023. VITL trades with a forward P/E of 208 and has ranged over a 52-week period from $10.30 to $48.41 with a 50-day moving average of $41.12.  Twelve-month trailing operating margin was 11.6 percent and profit margin 8.7 percent.  Return on assets over the past twelve months was 12.5 percent with a 22.6 percent return on equity.

At close of trading on August 7^th pre-release, VITL was priced at $34.72. Post-release on August 8^th VITL opened at $36.00, subsequently closing down at $31.50.

Approximately 35 percent of VITL equity is held by insiders with 66 percent owned by institutions. As of July 15^th 12.5 percent of the float was short.