Vital Farms Swings to Loss as Egg Prices Fall
Gross margin narrowed to 6.6% as excess inventory and portfolio-exit costs weighed on results.
Vital Farms (VITL), the pasture-raised egg producer, swung to a $31.1 million net loss in the second quarter as declining sales and supply-management costs deepened a profitability reversal.
Net revenue fell 10.1% from a year earlier to $166.0 million, reversing from 15.4% growth in the first quarter and 28.7% growth in the final quarter of 2024. Revenue also declined sequentially in both 2025 quarters.
The sales reversal was driven by a $19.8 million volume decline excluding breaker and wholesale sales, partly offset by a $1.1 million price-and-mix benefit. The first quarter had recorded a $34.7 million volume benefit, while the final quarter of 2024 benefited from both volume and price-and-mix growth.
Retail-channel revenue declined to $158.0 million from $176.1 million a year earlier as total-category retail egg prices fell more than 35%. Vital Farms gained more than 200 basis points of shell-egg retail dollar share.
Profitability deteriorated faster than sales. Adjusted EBITDA fell from $29.2 million in the final quarter of 2024 to $5.0 million in the first quarter, then turned to a $26.6 million loss in the second quarter. The latest result compared with positive adjusted EBITDA of $29.9 million a year earlier.
Excess inventory and low-priced breaker and wholesale sales reduced gross profit by $19.5 million, up from an estimated $4.9 million in the first quarter. Farmer-contract amendment amortization and costs tied to the butter exit brought supply-management and other discrete gross-profit expenses to $28.1 million.
Vital Farms continues to expect 2025 revenue of $775 million to $800 million and adjusted EBITDA of $0 to $10 million. Its outlook issued with fourth-quarter results had called for revenue of $900 million to $920 million and adjusted EBITDA of $105 million to $115 million. The company also cut planned capital spending to $70 million to $75 million from $140 million to $150 million, slowing work on Vital Crossroads and new accelerator farms to align capacity additions with demand.
The board terminated the stock-repurchase program after Vital Farms bought 1.13 million shares for $15.0 million during the quarter. The company replaced its revolving facility with $185 million of new credit facilities after ending the period with $21.2 million in cash and securities and $30.0 million of debt, adding liquidity as operating cash flow swung to a $45.9 million use of cash in the first half.